Primary Metals Manufacturing

The US primary metals industry includes 5,000 companies with combined annual sales of about $140 billion. Large companies include Nucor and US Steel (steel); Alcoa (aluminum); and Freeport-McMoRan Copper & Gold. The industry is highly concentrated: the 50 largest producers hold more than 90 percent of the raw steel market. Secondary production of products from raw steel and other metals is also concentrated.

COMPETITIVE LANDSCAPE

Demand comes largely from the manufacturers of durable goods like 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 operating efficient local mini-mills or producing specialty products. The industry is capital-intensive: average annual revenue per worker is close to $300,000.

PRODUCTS, OPERATIONS & TECHNOLOGY

The industry includes manufacturers and processors of steel, iron, aluminum, copper, and specialty metals like titanium, molybdenum, and beryllium. Steel products account for about 50 percent of the market. Companies are involved in three major types of activities. Primary processing is the separation of metal from ores in a furnace to produce slabs or ingots of metal. Secondary processing involves mainly the rolling or drawing of metal slabs into sheets, plates, foil, bars, and wire. Foundry operations produce metal shapes by pouring molten metal ...