Western U.S. Flat Steel Market Size, Share & Trends Analysis Report By Product (Hot Rolled Coil, Coated Steel), By Application (Buildings & Construction, Energy), And Segment Forecasts, 2023 - 2030

Report Overview

The Western U.S. flat steel market size was valued at USD 27.31 billion in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 5.6% from 2023 to 2030. The rising construction activities in the region are driving market growth. According to the U.S. Census Bureau, the economy of the country significantly benefits from its construction industry, which carries out construction activities close to USD 1.4 trillion in a year. Furthermore, the construction industry accounted for a share of approximately 4% of the U.S. GDP in 2021. The industry has been thriving in the Western U.S. states owing to the ongoing economic developments and rising number of infrastructure projects.

In 2021, the market witnessed a huge spike in volumes and revenue due to resuming manufacturing activities and rising demand for flat steel from the construction and automotive industries. The revenue increased significantly compared to the volumes owing to the rise in prices of flat steel in the Western U.S. However, in 2022 the revenues declined due to the Russia-Ukraine war, which led to huge economic shocks across the globe.

The primary drivers for the growth of the construction industry in the U.S. are the increasing population, ongoing urbanization, and growth in nuclear families at an accelerated rate. The rising popularity of multiple-home ownerships and the increasing number of home renovation and redevelopment projects contribute to the growth of the construction industry in the region, and thus, benefit demand for flat steel.

The ongoing automotive manufacturing and upcoming developments in the Western U.S. are expected to be potential growth generators for flat steel manufacturers in the region owing to the presence of the companies such as Rivian Automotive and Tesla, Inc. For instance, the Fremont factory by Tesla, Inc. in California is the largest automobile factory in North America. In August 2021, Rivian Automotive announced its plan to invest USD 5.0 billion to construct a car manufacturing factory in Fort Worth, Texas.

The fluctuations in the steel market act as restraints for market growth. The product has experienced daily price swings in the U.S., along with fluctuations in the costs of raw materials such as iron, coal, and scrap. The impact of demand and supply dynamics leads to extreme volatility in the prices of the raw materials, which thus, affects the production and supply of flat steel.

Application Insights

Based on application, the building & construction industry held the largest revenue share of over 36.0% in 2022. The industry is of key significance in the Western U.S. states. For instance, according to Associated General Contractors of America (AGC), in 2021, the construction industry contributed USD 129.0 billion (3.7% share) to the GDP of California. The industry contributed USD 93.0 billion (4.7% share) to the GDP of Texas, while it contributed USD 29.0 billion (4.3% share) to the GDP of Washington.

The automotive & transportation segment is expected to register the fastest growth rate of 7.8%, in terms of revenue, over the forecast period. Rising economic growth, improving transportation, and major investments by state governments in the EV industry are propelling segment growth. For instance, California provides discounts to consumers for compact plug-in hybrid electric vehicles (PHEVs) and zero-emission vehicles (ZEVs). Families with low incomes are also entitled to an additional discount of USD 2,000 in California.

Energy is another vital segment of the market. The capacity of renewable energy is expected to increase by 50% between 2019 and 2024, according to the IEA. Nearly 60% of the estimated expansion in the U.S. is expected from solar and 25% from wind energy. These energy sources heavily depend on flat steel. For example, for every additional MW of solar electricity and wind power, 35 to 45 tons and 120 to 180 tons of steel are required, respectively. Thus, growth in the U.S. renewable energy capacity is expected to boost market growth over the forecast period.

Product Insights

Based on the product, cold rolled coil (CRC) held the largest revenue share of over 36.0% in 2022. These coils have low carbon content. Also, compared to the hot rolled coil, steel produced by this technique has a wider variety of surface finishes and is superior in terms of tolerance, concentricity, and straightness. Projects requiring extreme precision are best served by cold rolled. The CRC coil has significant demand due to its smooth surface finish and better corrosion resistance.

Coated steel is anticipated to register the fastest CAGR of 6.1%, in terms of revenue, over the forecast period. The growth is attributed to the corrosion-resistant properties of the product and wide usage in the Western & Southern U.S. construction industry. Coated steel products have low production costs, better product quality, quicker processing times, low production dangers, energy conservation, reduced environmental impact, and high manufacturing without the need for capital investments in new structures and machinery.

Another reason behind the rapid growth of the electric vehicle (EV) market in the U.S. is the Zero Emission Vehicle (ZEV) program. A number of applications for coated steel can be found in EVs, such as in battery cases. The rising EV plants in the Western states of the U.S. will ensure growing production of EVs in the country and are anticipated to augment the product demand over the forecast period.

Key Companies & Market Share Insights

The market is fragmented with the presence of both established producers and smaller-scale service centers. Partners, collaborations, acquisitions, mergers, and agreements are some of the strategies used by leading manufacturers to succeed. For instance, in February 2022, Nucor Corporation acquired 50% stakes in California Steel Industries by purchasing the stakes from a subsidiary of Vale S.A. at a price of around USD 400 million. The acquisition will help in achieving efficiency through Nucor’s support and advanced technologies. Some prominent players in the Western U.S. flat steel market include:

• California Steel Industries

• Commercial Metals Company

• Phoenix Steel Service, Inc.

• Rolled Steel Products Corporation

• Steel Dynamics

• Steelco USA

• United States Steel Corporation

Western U.S. Flat Steel Market Report Scope

Western U.S. Flat Steel Market Segmentation

This report forecasts revenue and volume growth at the Western U.S. level and provides an analysis of the latest industry trends and opportunities in the segment from 2018 to 2030. For this study, Grand View Research has segmented the Western U.S. flat steel market report based on product and application:

• Product Outlook (Volume, Kilotons, Revenue, USD Million, 2018 - 2030)

  • Hot Rolled Coil

  • Cold Rolled Coil

  • Coated Steel

  • Others

• Application Outlook (Volume, Kilotons; Revenue, USD Million, 2018 - 2030)

  • Building & Construction

  • Automotive & Transportation

  • Machinery & Equipment

  • Energy

  • Others