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Home > Industrial Markets > Advanced Materials > Metals/Minerals
Steel Distribution
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| Published Date:
November 2008
Published By:
First Research, Inc.
Page Count:
10
Order Code:
R3470-1990
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In the US, about 10,000 companies distribute steel and other metals, with combined annual revenue of $110 billion. Large companies include Ryerson, Thyssen, Metals USA, and Reliance Steel & Aluminum. The industry is fragmented: the 50 largest companies only hold about 50 percent of the market. A typical large distributor has annual sales of $50 million and around 35 employees.
COMPETITIVE LANDSCAPE
The health of the manufacturing and construction industries drives demand for steel. A distributor’s sales volume determines profitability because many costs are fixed. Large distributors benefit from economies of scale in purchasing, processing, and distribution. Small companies can compete by specializing in particular products or offering special processing services.
PRODUCTS, OPERATIONS & TECHNOLOGY
Steel products are made from carbon or alloy, stainless or specialty steels, and come in the form of sheets, plates, bars, rods, tubes, and structural items like rails and I-beams. In addition to selling steel mill products, distributors sell various processing services that customize products for particular customers. Because of the large number of steel products, most distributors specialize in the types of steel they carry and types of processing operations they perform. Different grades of metal and the varying thicknesses and sizes of materials result in a large variety of products. A large distributor may handle 85,000 products.
Although several large companies have grown by acquisition in the past decade, most distributors have just one facility and ...
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