Increasing steel prices and higher output will result in moderate revenue growth
Los Angeles, CA (PRWEB) February 15, 2012
The global economic crisis resulted in a dramatic reduction in demand for steel. When the activity from construction and manufacturing, which are the primary customer markets for steel products, took a steep fall, sales in the Iron and Steel Manufacturing industry also contracted. “After industry revenue plummeted in 2009, major participants described market conditions as the worst they had ever experienced,” says IBISWorld industry analyst Brian Bueno. Revenue is projected to increase 3.3% to $114.8 billion in 2012 as producers increase output and some markets experience improving demand. Despite recent growth, IBISWorld projects industry revenue to increase a mere 0.9% average annual rate from 2007, driven by the severe decline that occurred in 2009. Over 2010 and 2011, prices recovered strongly as demand from the industry's major markets bounced back. However, according to Bueno, “Because near-term economic growth in Europe and the United States remains uncertain, steel prices are expected to experience a downward correction over 2012.”
Increased international competition will characterize the future of the industry. This trend, combined with ongoing weak domestic demand and frequent acquisition and merger activity, has resulted in fewer US enterprises in the past five years. Over the five years to 2017, fluctuating but generally increasing steel prices and higher output will cause revenue to grow. This growth is minimal, though, compared with the iron and steel industries of competing leading nations.
The Iron and Steel Manufacturing industry is moderately concentrated. The major players include ArcelorMittal, the Nucor Corporation, United States Steel Corporation and AK Steel Holding Corporation. Over the past decade, concentration has increased due to industry restructuring and merger activity, which occurred heavily in the early part of the decade. In addition, multiple smaller firms either exited or were acquired by larger companies during the economic crisis. Consolidation, and therefore industry concentration, is expected to continue an upward trend in the next five years. This is the result of an attempt to deal with increasing international competition for domestic customers and rising input costs.
For more information, visit IBISWorld’s Iron and Steel Manufacturing in the US industry page.
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IBISWorld industry Report Key Topics
Firms in this industry manufacture pig iron, steel and ferroalloys. Pig iron may be manufactured in a blast furnace or via newer direct reduction methods. Steel may be manufactured in basic oxygen furnaces (newly made steel) or in electric arc furnaces (recycled steel). The industry also includes firms that manufacture basic steel shapes (e.g. bars, plates, rods, sheets, strips and wire) or form pipes and tubes from steel they have produced themselves.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.