Metal Service Centers
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 6,400 metal service centers in the US process, store, and distribute metals for end use in a variety of industries. Companies may specialize in a particular type of metal or serve a specific industry. Service centers offer finished products in many forms, including sheets, plates, beams, bars, angles, and tubes.
Volatile Metals Prices
Metal prices are volatile due to fluctuations in foreign and domestic production capacity, raw material availability and related pricing, metals consumption, tariffs, import levels into the US, governmental regulations, and the strength of the US dollar relative to other currencies, among other factors.
Developing Retail Opportunities
Some metal service centers are combining wholesale operations with retail to generate incremental revenue.
Industry size & Structure
A typical metal service center or distributor operates out of a single location, employs 22 workers, and generates about $22 million annually.
- The metal service center and distributor industry consists of about 6,400 companies which employ about 140,000 workers and generate about $142 billion annually.
- Most companies are small, independent operators - about 74% have a single location and 77% employ less than 20 workers.
- Customer industries include manufacturing, fabrication, construction, transportation, agriculture, energy, automotive, appliance/HVAC, architecture, heavy equipment, defense, and machinery.
- Large companies include Reliance, Inc. (formerly Reliance Steel & Aluminum), Reliance subsidiary Metals USA, MRC Global, Ryerson, ThyssenKrupp Materials, and Samuel, Son & Co.
Industry Forecast
Metal Service Centers Industry Growth
Recent Developments
Jan 23, 2025 - Prices Drop Amid Falling Sales
- Producer prices for metal and mineral wholesalers, which includes metal service centers, fell 14.7% in November after rising 13.6% in the previous November-versus-November annual comparison, according to the latest US Bureau of Labor Statistics data. Prices are down amid declining sales for metals and minerals distributors, which sank 10.6% year over year in November and 13.1% from the previous month, according to Census Bureau data. Employment by metal service centers grew 5.5% YoY in October, while average industry wages increased 2.2% over the same period to $28.70 per hour, BLS data show.
- Metal service centers that adopt a hands-off approach to moving and storing materials are more efficient at serving their customers, Metal Center News (MCN) reports. Efficiency along the supply chain is driven by taking hands off of the metals and reducing the number of times inventory is moved. Two of the biggest trends in moving and storing metal in service centers, according to MCN, are automation and robotics, part of a rapid shift toward fully-automated inventory management, including automated storage and retrieval systems (ASRS) and automatic picking robots to streamline warehouse operations. ASRS allow for accurate, real-time, inventory tracking and retrieval, while robots alleviate labor shortages and increase productivity. They also enhance safety by limiting human exposure to equipment and hazardous environments, MCN reports. The accident incident rate of metal merchant wholesalers was 3% in 2023, higher than the rate across all industries, according to the latest OSHA data.
- The construction sector, an important customer industry for metal service centers, is looking to recent interest rate cuts by the Federal Reserve to spur demand for new construction, Metal Service Center (MSC) reports. In an examination of why the US construction sector has fared as well as it has in the recent hostile interest rate environment, MSC consulted industry experts who generally agree 2025 will bring improvement. Longer term, the US steel industry’s focus on decarbonization and sustainability should be a plus. “We’re an important part of the sustainability solution, not part of the problem,” Brian Raff, VP Sustainability and Government Relations for the American Institute for Steel Construction, told MSC. A source of concern however is the Trump administration’s threat to hike tariffs, which, if realized, would cause imports to become more expensive and could encourage domestic manufacturers to raise their prices in tandem with tariffs.
- The robust sales growth enjoyed by metal service center companies in 2021 and 2022 came to an end last year, brought down by lower sales volumes and prices, Metal Center News (MCN) reported when it published its 2024 MCN Top 50 Service Center list in September. North America's Top 50 service centers reported sales of $76.5 billion in 2023, down 10% from the record-high $84.9 billion in 2022, according to MCN. Still, 2023’s sales total was higher than any pre-COVID year since the publication began tracking sales data. Reliance Inc., North America’s largest service center company, wasn’t immune from the industrywide decline, with net sales falling from a record $17 billion to $14.8 billion in 2023. Chicago-based Ryerson, the #2 service center company, reported sales of $5.1 billion last year, a decline of 19% from 2022, per MCN.
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