| SIC Codes: | 5051 |
| NAICS Codes: | 423510 |
Companies in the industry distribute steel and other primary metals and metal products and may also provide sawing, shearing, bending, leveling, cleaning, or edging services. Major companies include Reliance Steel & Aluminum, Ryerson, and Schnitzer Steel Industries (all based in the US), along with China Minmetals (China), Salzgitter (Germany), and Sojitz (Japan).
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. The industry is concentrated: the 50 largest companies generate about 50 percent of revenue.
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 more than 100,000 products.
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