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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 6,800 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 Commodity Markets
Unpredictability in the metals commodity markets can affect costs, profitability, and product availability.
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 20 workers, and generates about $20 million annually.
- The metal service center and distributor industry consists of about 6,800 companies which employ about 139,000 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 Steel & Aluminum, Metals USA, MRC Global, Ryerson, ThyssenKrupp Materials, and Samuel, Son & Co.
Industry Forecast
Metal Service Centers Industry Growth
Coronavirus Update
May 17, 2022 - US to Lift Tariffs on Steel from Ukraine
- In a move that could benefit metal service centers that source metal from overseas, the Biden Administration in May announced it will lift tariffs on Ukrainian steel for one year. Although Ukraine is a fairly minor supplier of steel to the US, ranking 12th among America’s foreign suppliers, the lifting of the 25% tariff on foreign steel was welcomed by US metal manufacturers and users. The Coalition of American Metal Manufacturers and Users (CAMMU), which represents more than 30,000 companies in the manufacturing sector and downstream industries, said the steel and aluminum tariffs were exacerbating supply chain issues and making it harder for domestic manufacturers to obtain raw materials to meet demand.
- Rebounding demand and rapidly rising prices for steel are boosting profits for US steelmakers and costing their customers more. Strength in the market is helping the nation’s steel producers offset rising raw materials costs, triggered by the conflict in Ukraine. Steelmakers in April 2022 said demand is rising after a slump earlier in the year, driven by strength in the commercial construction and heavy equipment industries and gradually expanding automotive production, according to The Wall Street Journal. “Overall, the end markets that we serve, the underlying demand remains incredibly robust,” Leon Topalian, CEO of Nucor, told the Journal in April. Rapidly rising steel prices allowed companies to turn in better-than-expected profits despite higher costs for raw materials in the first quarter.
- Russia’s invasion of Ukraine has led to a spike in metal prices. Russia and Ukraine are major global suppliers of iron, steel, aluminum, nickel and palladium. Sanctions and bans on Russian metals are driving up the price as supply tightens in the world market. On March 10, futures prices jumped 52.4% for aluminum, 211% for nickel, and 29.8% for palladium. Some metals suppliers have stopped quoting prices because the market is so volatile.
- US service centers' steel shipments increased 5% in March 2022 compared to a year earlier, according to the Metal Service Centers Institute. Aluminum shipments were up a slight 0.1%.
- Employment in metal services rose 3.7% in March 2022 year over year, but remained 4.6% below pre-pandemic March 2020.
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