Metal Service Centers NAICS 423510

Mar 23, 2025 - Prices Sink Amid Falling Sales

• Producer prices for metal and mineral wholesalers, which includes metal service centers, sank 20.2% in December after rising 25.7% in the previous December-versus-December annual comparison, according to the latest US Bureau of Labor Statistics data. The producer price index for metal and mineral wholesalers, which measures prices producers receive for their products, declined amid falling sales by distributors, which shrank 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 5.7% YoY in January, while average industry wages fell 4.2% over the same period to $28.00 per hour, BLS data show.
• 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.

• 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.