Iron & Steel Mills

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 260 iron and steel producers in the US process iron ore, scrap metal, and other raw materials into semi-finished steel products. Products include iron ore, steel sheets (cold or hot rolled), strips, bars, plates, pilings, and rails. Major customers include fabricators, manufacturers, intermediate steel processors, and service centers that convert semi-finished steel into finished goods. Some companies are vertically integrated, and may own facilities to produce raw materials and/or finished steel products.

Competition From Alternative Materials

Depending on the end use, steel products compete with goods made from concrete, aluminum, plastics, wood, and composites.

Competition From Imports

Imports account for about 25% of the US iron and steel market.

Industry size & Structure

The average iron or steel mill employs about 338 workers and generates about $457 million annually.

    • The iron and steel mill industry consists of about 260 companies that employ 82,000 workers and generate about $118.8 billion annually.
    • The industry is highly concentrated and dominated by large companies. The top 20 companies account for 89% of industry sales.
    • Some companies are vertically integrated, and may own facilities to produce raw materials and/or finished steel products.
    • Large domestic steel manufacturers include US Steel, Nucor, Commercial Metals, and Steel Dynamics. Some large companies have foreign operations.
                              Industry Forecast
                              Iron & Steel Mills Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Apr 23, 2023 - EU Approves Carbon Tax Legislation
                              • The European Union’s parliament in April approved legislation to tax imports based on the greenhouse gases emitted to make them, The Wall Street Journal reports. The carbon tax legislation is the first of its kind and will initially cover imports of iron, steel, aluminum, cement, fertilizer, electricity and hydrogen, according to WSJ. The EU’s action put other countries, including the UK and the US, under pressure to take similar action. The CEO of the American Iron and Steel Institute (AISI) Kevin Dempsey cited growing bipartisan support for such a tax in the US. While domestic iron and steel producers have voiced concerns that the plan would erect a web of red tape for companies seeking to export to Europe, the fact that it would disadvantage steel from Asia (China in particular) that’s produced with much higher carbon intensity, would favor US producers.
                              • Green steel could spur economic revival in Southwest Pennsylvania, according to a new report by the Ohio River Valley Institute, cited in Climate Action. Green steel – steel manufactured without the use of fossil fuels – as opposed to coal-fired production could reduce or even eliminate carbon emissions. Wide-scale adoption of green steel manufacturing for primary steel, already being pursued by leading steelmakers in Spain, Germany and Sweden, would reduce the emissions of an industry that is responsible for 7% of global greenhouse gases, and almost a quarter of the world’s industrial emissions, according to the report “Green Steel in the Ohio River Valley.” SW Pennsylvania has the water and wind resources and a long history of steel making that would enable it to change from emissions-heavy coal to hydrogen, which can be used to convert iron to crude steel in an electric arc furnace, according to the report.
                              • To curb emissions from its heavily polluting steel mills, China is considering trimming its crude steel production by about 2.5% this year, Reuters reported in March. (Crude steel is defined as the first solid steel product upon solidification of liquid steel.) Citing sources who attended a March policy making meeting, Reuters reported the 2.5% target proposed by policymakers has not yet been finalized. The government of China, the world’s leading steel producer, is pushing for steel output to drop from a record of more than 1 billion tons, in a campaign triggered by President Xi Jinping’s pledge to deliver a carbon neutral economy by 2060. Previous efforts to squeeze steelmakers, however, drove up prices and created a headache for policymakers fretting about surging inflation, according to Bloomberg.
                              • US steel mills shipped 7,148,270 net tons, a 3.6% increase from the 6,901,567 net tons shipped in December 2022, and a 7.9% decrease from the 7,757,807 net tons shipped in January of 2022, the American Iron & Steel Institute (AISI) reported in March. A year-over-year comparison of January shipments shows shipment of hot rolled sheet declined by 12%, cold rolled sheet shipments fell 10%, and corrosion resistant sheet and strip fell 7%. January's shipment figures show steel output in the US is advancing slowly, but that domestic steelmaking still has considerable room to grow to match output in the early part of 2022.
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