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 based in the US); along with ArcelorMittal (Luxembourg); Baowu, CHALCO, and Jiangxi Copper (China); JFE Steel Corporation and Nippon Steel (Japan); POSCO (South Korea); Rio Tinto (Canada); Rusal (Russia); Tata Steel (India); and ThyssenKrupp (Germany).

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. Large companies enjoy economies of scale in purchasing and 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: the 50 largest companies generate more than 60% of revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major sources of revenue for the industry include hot rolled carbon steel products, which accounts for about 10% of industry revenue. Other products include aluminum plates (about 5%) and cold rolled carbon steel products (about 5%).