Metal Service Centers NAICS 423510

Mar 23, 2026 - Iran War Disrupting Metals Markets

• The Middle East conflict and closure of the Strait of Hormuz are disrupting global metals supply chains, according to analysts at Wood Mackenzie. The region is a key supplier of aluminum and steel inputs, and disruptions to ports and shipping routes are tightening supply and raising market risk for companies that purchase metals. Aluminum markets were already projected to face a deficit, and interruptions to exports from Gulf producers could further tighten supply and push prices higher. The most immediate impact is on steel markets. Iran typically exports about 4 million tons of finished steel and 7–8 million tons of semi-finished products annually, roughly 11% of global semi-finished steel trade. With ports disrupted, this supply has effectively disappeared, causing billet prices to surge as buyers seek alternative sources. For metal service centers, the conflict increases the likelihood of higher costs, shipping delays, and supply volatility.
• Shipments by US steel mills rose 12.7% in September compared to a year ago and were up 3.5% versus August as mills ramped up their output, according to the latest data from the American Iron and Steel Institute (AISI). Year to date in September shipments were up 4.6% from the same period last year. The YTD comparison shows the following changes: corrosion resistant sheet and strip, up 4%; hot rolled sheet and strip, down 1%; and cold rolled sheet and strip, down 4%, per the AISI. Steel mills have continued to boost their output in recent months, operating at a capability utilization (capacity) rate of 76.7% in the week ended November 8, compared to a 72.6% capacity rate in the comparable week in 2024. Tariffs of up to 50% on imported steel are among the factors likely driving the increase in US mill operating rates.

• To avoid stiff tariffs on imported metals and benefit from the reliability and timeliness offered by shorter supply chains, more companies are considering sourcing from US-based mills, according to metals service center Mead Metals. Makers of metal products who reshore their supply chains can benefit from relationships with local mills and service centers that offer just-in-time shipping and proximity advantages that reduce inventory, logistics costs, and lead times. But with demand for local suppliers rising, purchasing managers could see tight availability for certain metals, underscoring the need for proactive sourcing and flexible inventory strategies, according to Mead Metals. As for tariffs, a 2019 Federal Reserve study found that while tariffs imposed by the first Trump administration increased US steel production, higher input costs from tariffs reduced manufacturing jobs, relative to what it would have been without tariffs, and raised production costs for metal-based goods.
• Producer prices for metal and mineral merchant wholesalers rose 10.7% in November compared to a year ago, after falling 16.7% in the previous November-versus-November annual comparison, according to the latest US Bureau of Labor Statistics data. Metal prices are volatile due to fluctuations in foreign and domestic production capacity, supply and demand, tariffs, and other factors, all of which have an impact on metal service centers procurement costs and sales. Employment by the industry grew 2.6% year over year in November, while average wages at metal and mineral (except petroleum) merchant wholesalers declined 6.3% over the same period to $26.77 per hour, BLS data show.