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us steel industry

A Canadian Steel Company Realized an Increase in Profit Margins by 19% with Infiniti’s Market Intelligence Engagement

US Steel Industry Outlook

The US steel industry is currently witnessing a period of low growth that has put pressure on steel prices and created uncertain demand in the market. In addition, the lack of supply chain visibility, increasing price volatility, and overcapacity issues are presenting additional challenges for companies in the US steel industry. Consequently, companies in the US steel industry are compelled to streamline operations, improve supply chain visibility, and efficiently tackle challenges coming their way.

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Business Challenge

The client is a full-service steel manufacturer and distributor based out of Canada. The client serves industries such as manufacturing, construction, and mining.

A well-known Canadian steel manufacturer wanted to identify the potential for their steel product in the US steel industry. Also, the client wanted to understand the competitive landscape in the US steel industry and gain insights into the market potential and top players in the US steel industry. Furthermore, the client wanted to gain an understanding of the US steel market landscape by understanding factors including investment environment, industry development, supply-demand conditions, and industrial capacity. As such, the client approached the experts at Infiniti Research to leverage their expertise in offering market intelligence solution.

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Furthermore, with Infiniti’s market intelligence engagement, the client also wanted to:

#1: Evaluate long-term sales potential for their product in the US steel industry

Due to slowing growth in the construction and manufacturing industry in China, steel manufacturers in the Chinese market were prompted to sell their excess inventory to steel companies in other countries at a significantly subsidized price. This subsequently affected the business in the local markets of other nation as it greatly saves on operational cost. Furthermore, the fall in the prices for steel products resulted in the shutdown of many steel producing plants in the US steel industry. The client, therefore, wanted to understand the opportunity for their products in the US and also evaluate long-term sales potential.

#2: Understand the impact of emerging regulations

The increasing import tariffs and initiatives to implement import duties on steel and aluminium could impact the global trade and relationships between countries. Hence, with Infiniti’s market intelligence engagement, the client wanted to understand changes in emerging regulations in the US steel industry and other related markets.

#3: Identify right suppliers

The client noted that usage of low-quality raw materials negatively impacted the production processes of US steel manufacturing companies. Furthermore, higher greenhouse (GHG) emission caused due to the usage of low-quality raw materials caused environmental disruption and higher energy consumption. The client, therefore, wanted to identify the right suppliers to provide high-quality raw materials in the US steel industry.

#4: Reduce supply-demand mismatch

With over 30% of the US steel industry’s revenue being generated from the oil and gas market, the supply-demand gap in the oil and gas market directly impacted overall growth of companies in the US steel industry. Hence, the client wanted to accurately forecast the supply-demand requirements and enhance their supply chain visibility.

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Solutions Offered

With over 15 years of expertise in helping companies devise a market entry plan, our experts helped the client to gain an in-depth understanding of the US steel market landscape. Factors such as market potential, investment environment, market developments, and supply-demand requirements were taken into consideration during the analysis.

As a part of the market intelligence engagement, the experts conducted a market potential analysis. Our market potential analysis helped the client to evaluate the potential demand for their products in the US steel industry. Furthermore, the client was able to evaluate the sales potential for their steel products for the next five years. The experts also analyzed the US steel industry size.

The next phase of the engagement involved US steel market scanning and monitoring. This helped the client to understand the changes and emerging regulations in the US steel industry and other related markets. Also, the client was able to understand the potential impact of changing factors on business segments.

The next phase of the engagement involved supplier identification and profiling. In this phase, the experts helped the client to select the right supplier by evaluating their cost, capabilities, and experience.

Also, the experts conducted competitive intelligence engagement to help the client understand the business strategies of top steel manufacturing companies in the United States. This helped them to identify the strengths and weaknesses of their key competitors.

Furthermore, the experts conducted a supply and demand analysis to help the client in identifying target stock levels to meet the rising demand for steel products in the US steel industry. And, the experts analyzed the US steel industry growth rate for the next five years.

Results Obtained

With the insights obtained from Infiniti’s market intelligence solution, the client was able to devise a go-to-market strategy and identify the best route to enter the US steel industry.

With Infiniti’s market intelligence engagement, the client was able to gain detailed insights on the market demographics and US steel industry’s competitive landscape. This helped them to successfully establish their base of operations to the United States. And, within one year, the client realized an increase in their profit margins by 19%.

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Top Challenges Currently Faced by Steel Manufacturers

The steel industry holds ample promising prospects for growth and profit. However, it cannot entirely be labeled as a sector that is devoid of threats and challenges. Currently, trade and overcapacity are some of the dominant issues for steel manufacturers.  

But the list, unfortunately, doesn’t end there; there are still several issues that steel manufacturers need to address to ensure that they function smoothly in the long run. Furthermore, the increasingly competitive environment is putting pressure on global steel companies to search for better ways to gain a competitive advantage in the market. We examine some of the key challenges that steel manufacturers need to tackle for hinderance free long-term sustainability in the market.

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Challenges faced by steel companies

Solid waste management

Steel manufacturing involves the production of large amounts of solid wastes while processing materials through various processes. But what steel manufacturers often overlook is the fact that these solid wastes contain several valuable products which can be reused if recovered economically. Players in the steel industry need to figure out ways by which they can make the best out of solid waste and reduce wastage of useful resources.

The problem of excess capacity

Despite growth rates for steel production being tapered globally since 2008, China continues to produce more steel every year. Consequently, almost half of the world’s steel is now manufactured in China. The high rates of overproduction, combined with volatile raw material prices add on to the struggle of steelmakers to make good profit margins. Therefore, before there can be any long-term structural growth in the steel industry, the amount of excess and less-efficient capacity needs to be shut down.

However, factors such as labor laws, environmental costs and permanent loss of the optionality value of the plants are curbing steel manufacturers from shutting down steel capacity permanently. Additionally, government intervention in the steel industry provides an additional political incentive to keep employing workers regardless of profitability.

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Growth in demand

With the increasing focus on infrastructure and development, global steel use is expected to rise in the years to come. However, there are some uncertainties in the rate of growth in emerging economies due to unresolved structural issues, political instability, and volatile financial markets.

The majority of the rise in demand will be met by primary raw materials (coal and iron ore). In years to come, increasing urbanization in emerging markets and the renewal of infrastructure in developed markets should mean that steel consumption will continue to grow steadily. The big question for steel manufacturers is whether they would be able to meet the growing demand, especially from emerging economies in the long run.

Price volatility of raw materials

The constantly fluctuating price of raw materials and weak steel prices have put significant pressure on steel margins.

However, steel manufacturers have been working hard to become competitive in other ways. They have been taking several steps to gain more control of their raw material pricing, while cost-cutting has led to production cuts in some regions. Several steel manufacturers are also investing a considerable amount of money into R&D for differentiating their products from other players in the market.

To know more about the challenges faced by steel manufacturers, request more info.

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How can Benchmarking Help Improve Cost Competitiveness in the Steel Market?

Steel is one of the top products in the manufacturing sector, and the market is getting intensely competitive with each passing day. Over the past couple of years, the global steel industry has been booming due to liberalization policies and increased infrastructural works. The fierce competition in the steel market can be undermined by the rise of Asian countries, such as India, ending the dominance of the USA. One of the biggest challenges faced in the steel market is to contain costs and increase the efficiency of their assets. Although individual players are well aware of their production assets, there is very little transparency about the cost-saving capabilities across the industry. As a result, cost benchmarking becomes a major challenge for players in the steel market. Instead of IR_Brochurefocusing on resource utilization alone, working with multiple operating points can yield a better result to overcome cost challenges.

Importance of overcoming the cost challenge

The demand in the steel market is primarily driven by the increasing the use of metal packaging materials, which is increasing at a faster rate compared to the GDP growth in the emerging markets. However, the use of steel as a packaging material is facing some stiff competition from alternatives such as aluminum, plastics, and composite materials. As a result, companies in the steel market are fighting hard to gain attractive volumes in the international steel market to tackle cost competitiveness. The global steel prices are mainly determined by two significant factors namely, overcapacity in China and low transportation costs globally. For instance, importing steel from other countries wasn’t considered to be economically viable, but low-cost global transportation has made it possible to source rebars from Turkey and hot-rolled coil (HRC) from South Korea. Additionally, for a few years in a row now, players in the steel market are facing overcapacity issues with utilization rates lingering at a low 70%, which is far from the healthy threshold of 80%.

How can benchmarking help overcome cost competitiveness in the steel market?

Steel manufacturers in the recent past have looked on to numerous large-scale programs to bring operational transformation and cost reduction in the steel market. They have resorted to benchmarks, including lean manufacturing and six sigma to eliminate waste, minimize production errors, and increase end-value for the customers. Steel manufacturers have shifted their focus to these areas to overcome cost competitiveness:

  • Companies in the steel market can improve their energy and material efficiency by looking at numerous methods including reducing yield loss in steelmaking, reducing the consumption of energy and consumables, and reducing the fuel rate of the blast furnace.
  • Manufacturers can look for ways to reduce wastage by implementing strict rules for input raw material, which will minimize the amount of rework and scrapped material.
  • Investing in automation and increasing the skill set of operators will directly improve labor productivity and optimize the
  • Increasing efficiency in maintenance, for instance, the wrench time of the maintenance workforce can be improved through the better planning and scheduling of maintenance tasks
  • Following a shared-services approach for group functions can help streamline sales and general administrative
  • By examining the total cost of ownership of various alternatives, players in the steel market can reduce their external spend when purchasing materials and services.

To know more about how benchmarking can help overcome cost competitiveness in the steel market:

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Leveraging Employee Engagement Strategies for a Steel Industry Client to Improve Productivity and Organizational Performance

In this era of constant innovations, it becomes essential for steel companies to understand the dynamic industry trends and refine their prevailing business models and portfolios to meet the demands of their end-users. Therefore, to better understand the demands of their end-users and  improve workforce efficiency, leading organizations in the steel industry are focusing on employee engagement. With years of expertise in offering employee intelligence services, Infiniti’s insights helps clients implement effective plans to boost workforce efficiency and better understand the needs and wants of their employees. 

The Business Challenge

A renowned steel company with branches spread across APAC was facing challenges optimizing their workforce efficiency and providing better clarity to the employees on their purpose and direction. The steel industry client wanted to increase the efficiency of their workforce by better interacting with their employees and understanding their major pain points. Moreover, with the help of this employee engagement study, the steel company wanted to understand the key drivers of engagement and plan activities to bolster employee engagement.

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Our Approach and Benefits of the Employee Engagement Solution

To help the steel industry client address challenges pertaining to their workforce efficiency, the employee engagement experts at Infiniti carried out extensive qualitative and quantitative studies and conducted interviews and discussions with prominent stakeholders in the steel industry. Additionally, to benchmark the performance of the steel company, the employee engagement experts at Infiniti also compiled from a wide array of secondary sources such as company presentations, industry journals, paid industry databases, and industry forums and communities.

This employee engagement study helped the steel company understand how to improve the efficiency of their workforce. Additionally, the steel industry client was able to improve their employee retention rate and implement strategic plans to boost their employees’ work efficiency. With the help of this engagement, the steel industry client was also able to implement strategic plans to attract young talent and leverage advanced technologies to make their work environment more engaging.

Additional Benefits of the Employee Engagement Solution

  • Helped build a passionate team and devised strategic plans to boost employee retention rates
  • Validated surveys and benchmarking tools to assess the employees’ level of engagement
  • Implemented strategic plans to improve the work environment
  • Efficiently managed the workload and performance and offered a conducive environment to attract and retain diverse workforce

A must-read case study for strategy specialists and decision makers looking to develop an understanding of steel industry


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Can Benchmarking Make You The “Man of Steel” in the Steel Industry

The relevance of benchmarking in the steel industry has been a topic of debate for several years. Many players in the industry were initially of the opinion that benchmarking may not be effective in the steel industry as there is limited transparency in the industry regarding what is achievable and how results can be replicated. However, over the years, stakeholders in the steel industry have realized that to achieve operational efficiency and cost-effectiveness, industry benchmarking is essential. So, what are the challenges faced in the steel industry, and how can steel companies effectively use benchmarking to their advantage in this lucrative industry?  Let us examine:

Benchmarking Challenges

Here are some of the key challenges that the players in the steel industry have to face with respect to adopting benchmarking practices:

  • Less amount of transparency among steel producers in the industry is making it difficult for companies to establish proper benchmarks
  • Conducting an effective benchmarking based on similar parameters without mixing up structural and performance differences


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