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 Imports

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

Competition From Alternative Materials

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

Industry size & Structure
Industry Forecast
Iron & Steel Mills Industry Growth
Source: Vertical IQ and Inforum

Recent Developments

May 23, 2024 - Weak Demand Depressing Prices
  • Producer prices for iron and steel mills fell 6.6% in March compared to a year ago after sinking 14.1% in the previous annual comparison, according to the latest US Bureau of Labor Statistics data. A slowdown in industrial production amid an oversupply of steel is sapping producers’ pricing power. Employment by the industry shrank 5.1% in March year over year, while average wages for workers at primary metals manufacturers rose 5.3% in April vs the prior year to $28.98 per hour, according to the BLS.
  • The tariff rate on certain steel and aluminum products under Section 301 will increase from 0–7.5% to 25% in 2024, The White House announced in May. President Biden said the higher tariffs will shield the US steel and aluminum industries from China’s unfair trade practices. In April remarks to US steel workers, Biden said that if an investigation by the Office of the US Trade Representative found China engaging in anti-competitive practices, it would consider more than tripling tariffs. The administration alleges China is overproducing goods to export to the US, driving down prices and hurting the American economy because higher-quality US products must compete with artificially low-priced alternatives. According to the OECD, Chinese steel exports grew from 68 million metric tons in 2022 to 95 million metric tons in 2023, a 40% increase in just one year.
  • To reduce their carbon emissions, steelmakers and other industrial companies may someday rely on heat-storing batteries to fuel their operations, The Wall Street Journal reports. Investors are pouring hundreds of millions of dollars into startups developing heat batteries (aka thermal batteries) that use renewable energy to heat blocks, rocks, or molten salt that release heat to power industrial processes. California start-up Antora Energy is developing batteries made of carbon blocks that discharge heat on demand at temperatures as high as roughly 2,750 degrees Fahrenheit, per WSJ. Antora and other heat-battery startups say thermal batteries can cheaply store days' worth of renewable energy using such an approach. Currently, industrial processes like cement and steelmaking burn fossil fuels to generate heat, with heat released from industrial processes accounting for about a fifth of global energy use and roughly 10% of greenhouse gas emissions, according to WSJ.
  • The Committee on Foreign Investment in the US (CFIUS) is reviewing the deal to sell US Steel to Japan’s Nippon Steel, Fortune reports. CFIUS is a US Treasury-led interagency panel that has the power to recommend the president block deals if they pose a threat to national security. Coming in an election year, the sale of an iconic US industrial company to a foreign operator has political and policy implications for the Biden administration, which has sought to expand the definition of national security to include safeguarding the economy. The United Steelworkers union opposes the sale, saying it will cost members jobs. Short of blocking the deal, the administration could require the steel companies to agree to certain terms, including that the merged entity maintain steel-production capacity or protect manufacturing techniques, according to The Wall Street Journal.
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