Metal Service Centers NAICS 423510

Jan 23, 2026 - Accelerating Industry Consolidation

• Worthington Steel’s planned acquisition of Germany’s Kloeckner & Co would create North America’s second-largest steel service center company, with over $9.5 billion of combined revenue, according to a Worthington press release. The merger would be one of the most significant consolidation moves in the metal service sector in years. By absorbing Kloeckner’s 110 locations across North America and Europe, Worthington gains major scale in carbon flat‑roll, stainless, aluminum, electrical steel, and long products, deepening its shift toward higher‑value processing. The merger reflects the accelerating consolidation trend as service centers seek size, efficiency, and diversification to stay competitive amid volatile steel markets. Last fall, metals distributors and service centers Ryerson and Olympic Steel announced they would combine operations in a transaction slated to close in the first quarter of 2026. Together, Ryerson and Olympic would have about $6.5 million in combined annual revenue and 160-plus locations.
• 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 7.2% in September compared to a year ago, after posting a flat previous September-versus-September 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 3.6% year over year in August, while average wages at metal and mineral (except petroleum) merchant wholesalers declined 5.5% over the same period to $26.91 per hour, BLS data show.