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
Nov 23, 2024 - Payrolls Grow Amid Falling Sales and Prices
- Producer prices for metal and mineral wholesalers, which includes metal service centers, declined 1.1% in September after falling 11.2% in the previous September-versus-September annual comparison, according to the latest US Bureau of Labor Statistics data. Prices are falling amid declining sales for metals and minerals distributors. Employment by metal service centers grew 3.5% in September year over year, while average industry wages inched up 0.7% over the same period to $28.93 per hour, BLS data show.
- 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 incoming 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.
- The Fabricator reported in July that metal products manufacturers that source foreign-made steel routed through Mexico are facing higher supply costs due to new tariffs imposed by the Biden administration in July. To stop China from avoiding import taxes by routing steel and aluminum through Mexico, the US has imposed a 25% tariff on Mexican steel that is melted or poured outside North America before being turned into a finished product. Previously, that steel would have entered the country duty-free. Aluminum imports from Mexico will face a tariff of 10% if they contain metal smelted or cast in China, Belarus, Iran, or Russia, said the White House’s National Economic Council director. While US steelmakers have welcomed the higher tariffs, companies that rely on imported steel to manufacture their products generally oppose the tax hike.
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