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 300 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 273 workers and generates about $310 million annually.

    • The iron and steel mill industry consists of about 300 companies that employ 82,600 workers and generate about $93 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

                              Nov 21, 2022 - Tariffs on Hot-Rolled Steel to Remain in Place
                              • The US International Trade Commission (USITC) in October decided to maintain the existing countervailing duty order on imports of hot-rolled steel from South Korea and the antidumping duty orders on imports of hot-rolled steel from Australia, Japan, Netherlands, Russia, South Korea, Turkey, and the United Kingdom. The USITC based its decisions on a five-year sunset review of the tariffs that found that US steel manufacturers would be hurt if the tariffs were removed. However, the commission agreed to remove the existing antidumping duty and countervailing duty orders on imports of hot-rolled steel from Brazil, according to The Fabricator.
                              • US imports of Russian steel have dropped to such a low level that sanctions aren’t necessary, commodity price reporting agency Fastmarkets reported in October 2022. Monthly steel imports from Russia have plummeted since it invaded Ukraine in February 2022 to less than 100 tons in July and August – some four to five months after the start of the war and roughly the time it would take to ship from there – versus nearly 112,000 tons in June 2021 and more than 210,000 tons in July 2021, according to US Census Bureau data. Russia had been the fifth-largest exporter of steel into the US, supplying 1.47 million tons of semi-finished and finished products, representing more than 5% of total US imports, in 2021, the data showed. US importers of steel from Russia face substantially higher duty rates and shipping problems stemming from the US suspension of normal trade relations with Russia in April.
                              • The construction industry – a major consumer of long steel products – is far behind the automotive sector when it comes to prioritizing sustainability, according to commodity price reporting agency Fastmarkets. “Green steel” – steel produced without creating CO2 emissions and by using fossil-free energy sources – initiatives have seen considerable uptake across flat products used by automakers, which are using green steel to achieve their net-zero emissions goals. However, the same can’t be said for construction companies, which haven’t been heard to have pledged to go green, or to have a green strategy, Fastmarkets reports. Unless the government creates legislation which means buyers have to fulfill a quota of green steel each year, construction companies are unlikely to do so.
                              • Rising energy costs are forcing slowdowns and shutdowns of steel plants in Europe. Citing soaring gas and electricity prices as Russia dials back supplies, steelmaker ArcelorMittal plans to close two of its plants in Germany, The Wall Street Journal reported in September 2022. One of the world’s largest steel producers, ArcelorMittal said it had already reduced its consumption of gas in Germany, but that higher costs are making production at the two plants unprofitable. Slated for closure is a blast furnace in Bremen, Germany and a plant that produces wire rod in Hamburg, according to WSJ. Separately, the company announced it will shut down a blast furnace in Spain due to slowing global demand. Combined, the German and Spanish plants produce around 3.65 million metric tons of steel a year, about 5% of ArcelorMittal’s annual production.
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