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 Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 6,500 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 23 workers, and generates about $22 million annually.

    • The metal service center and distributor industry consists of about 6,500 companies which employ about 148,700 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
                            Source: Vertical IQ and Inforum

                            Recent Developments

                            Jan 23, 2024 - Wages Fall Amid Rising Employment
                            • Average wages at metal service centers declined by nearly 1% in November compared to a year ago amid rising employment, according to the US Bureau of Labor Statistics. Overall employment by metal centers ticked up year over year in November, although it remained below pre-pandemic levels. The producer price index for metal and mineral wholesalers rose sharply in December compared to a year ago, rebounding from its 2023 low in September, per the BLS.
                            • Less is more when it comes to material handling, according to Metal Center News’ (MCN) Materials Handling Report. The movement of metal through a modern metal service center relies increasingly on automation, the benefits of which include moving products faster and more efficiently, decreasing opportunities for damage to occur, improving safety, and reducing reliance on hard-to-find labor. “The less frequently you have to touch it, the faster it gets out the door to your customers,” says Jason Clark, president of Canrack Storage Systems, adding “There’s a lot less likelihood you’ll make mistakes or have damage to the product.” MCN notes that material handling equipment providers are stepping up by creating equipment that handles much of the load for the operators, including the need to handle longer and wider material. Automated storage, racking, and retrieval systems are the next step in the evolution of material handling, per the MCN report.
                            • Heating, ventilation, and air conditioning (HVAC) – an important customer market for some metal service centers – while primed for long-term growth faces near-term uncertainty, Metal Center News (MCN) reported in November. Near term, the series of interest rate hikes by the Federal Reserve is a source of uncertainty for HVAC system providers. On the commercial side, warehouses and distribution centers have been sources of growth, while the residential market has been slow as interest rate hikes have made mortgages prohibitively expensive for borrowers, according to MCN. “There’s no question, the higher rates have negatively impacted the HVAC building and construction industry, " says Aaron Baldridge, VP of business development and aluminum sales at Wieland Metal Services adding, “That said, we are optimistic for the future; especially with new technologies on the horizon.” The decline in aluminum prices, down sharply from their peak in Q1 2022, also favors HVAC and metals service centers.
                            • Vendors that sell to the Department of Defense are facing a critical compliance deadline, Metal Center News reports. By October 2025 suppliers to the DoD must comply with the Cybersecurity Maturity Model Certification (CMMC), which mandates suppliers to have instituted the required cybersecurity practices and hardware to protect government data. Every DoD contractor or subcontractor, regardless of their size, must comply to be awarded a contract. “Once the requirements are finalized, organizations that don’t have CMMC certification will no longer be able to bid on DoD contracts,” warns Matthew Weber, a senior cybersecurity consultant. Because CMMC is still in its rule-making phase, some companies have opted to wait until the rule is finalized to begin preparing. However, it can take up to 18 months for an organization to achieve CMMC compliance, so companies that wait risk the loss of DoD contracts, according to Metal Center News.
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