Metal Service Centers NAICS 423510

May 23, 2026 - Slow Start to 2026

• Metal service centers across North America faced weaker demand early in 2026 as steel and aluminum shipments declined compared with 2025, according to the Metals Service Center Institute. US steel shipments fell 4.5% year over year in February, while Canadian steel shipments dropped 2.7%. Aluminum shipments also weakened in both markets. Industry analysts cited cautious customer purchasing, softer manufacturing activity, and ongoing economic uncertainty as key challenges for distributors and processors. Service centers are also managing pricing volatility tied to tariffs, global trade disruptions, and rising operating costs. Despite the slowdown, some manufacturers remain optimistic that infrastructure spending, energy projects, and improving industrial demand could support recovery later in the year. The February Metals Activity Report report highlights continued pressure on inventory management, margins, and purchasing strategies throughout the metals supply chain.
• The war in Iran 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.

• 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 dipped 0.2% in April compared to a year ago, after jumping 17.6% in the previous April-versus-April 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 2.4% year over year in March, while the average wage at metal and mineral (except petroleum) merchant wholesalers declined 1.9% over the same period to $27.64 per hour, BLS data show.