Primary Metals Manufacturing

Primary Metals Manufacturing

Brief Excerpt from Industry Overview Chapter:

Companies in this industry engage in smelting and refining of ferrous and nonferrous metals and include iron and steel mills, rolled steel shape manufacturers, aluminum producers, and copper foundries. Major companies include Alcoa, Nucor, and US Steel (all of the US), along with ArcelorMittal (Luxembourg), Baosteel and Hebei Iron and Steel (China), Nippon Steel and JFE (Japan), POSCO (South Korea), Rio Tinto Alcan (Canada), Rusal (Russia), Tata Steel (India), and ThyssenKrupp (Germany).

The global primary metals manufacturing industry generates annual revenue of more than $3 trillion. China leads all nations in crude steel and aluminum production by a wide margin. Other top steel producers include Japan, the US, India, Russia, and South Korea. Other major aluminum suppliers include Canada, Russia, and Australia.

The US primary metals industry includes about 3,500 companies with combined annual sales of about $280 billion and is expected to see high growth over the next two years. Key growth drivers include durable goods orders and nonresidential construction spending.

COMPETITIVE LANDSCAPE

Demand comes largely from manufacturers of durable goods such as motor vehicles, machinery, containers, and construction steel. The profitability of individual companies depends largely on efficient operations, because most products are commodities sold based on price. Big companies have large economies of scale in production. Accordingly, most producers of secondary products buy raw metal from the large producers. Small companies can compete by serving regional markets or producing specialty products. The US industry is concentrated:...