Adapting to Shifts in Steel Import and Export Demand

The promise of evolving global supply chains supporting nearshoring and country-centric reshoring is meant to tighten the grip of long-distance transport and reign in more localized control over raw materials and product supply.  

Meanwhile, commercial infrastructure growth is fueling steel demand, sending emerging markets into mainstream positioning. But sourcing steel abroad will come with added costs, mitigating the benefits of foreign-made materials, compared to purchasing them in the U.S.  

Industry forecasters anticipate a year-over-year rise in steel pricing: 

• Hot-Rolled Coil (HRC). $950 per ton (an 18.75% increase) 

• Rebar. $780 per ton (a 20% increase) 

• Wire Rod. $840 per ton (a 20% increase) 

Maybe your business involves other industries, where steel imports or exports seldom dot your day-to-day. Yet there’s no doubt that behind your product, sales, and facilities, steel improves your value chain. From forklifts to structural beams, and individual components that make computer motherboards hum, our reliance on steel remains. 

Consider the competition steel manufacturers will face—affecting customers involved in engineering technology products, automotive, locomotive, ships, building materials, and more. Identifying areas for greater operational, warehousing, and distribution solutions could hang in the balance between cost savings and shutting doors. 

A Slow Crawl Toward Steel Demand

Housing starts are on a tight leash due to inflationary pressures and interest rates stuck on unaffordable. Economic metrics across the globe correlate high regulation with low productivity. And while European countries focus on playing catch up, JPMorgan Private Bank has eyes on AI initiatives, and why the U.S. leads in those investments and research programs. 

For steel producers and suppliers, it’s all about the long game and finding innovative ways to support today’s industrial revolution. 

Imports and Exports Cross Unchartered Waters

Competition for capturing foreign markets is on the rise, but securing import and export business depends on the strength of relationships built, the impact of environmental deregulation, and how deep reshoring takes root. 

Not only does steel affect the economic security of specific countries, but there’s a global significance too. Government agencies and large-scale manufacturing enterprises rely on steel to: build and fortify defense systems, develop commercial infrastructure, and increase livelihood.  

Ninety-eight percent of iron ore production is used to make steel, and the process begins by extracting it from mines.  

The countries producing the most usable iron ore may surprise you: 

1. Australia 
2. Brazil 
3. China 
4. India 
5. Russia 
6. South Africa 
7. Ukraine 
8. Canada 
9. United States 
10. Iran 

There’s a connection between iron ore mining and production, and which countries potentially hold the most power in trade. It may seem issues abroad would do little to impact small-to-midsize businesses in the U.S. But the world’s supply of steel and the cost of acquiring it eventually hits home. 

Feeding India’s Hunger for Steel

Recently, India has been on a steel tear, though the tide could be turning. Like California, ravaged by extreme windstorms and destructive fires, India also faces challenges from extreme weather events. With commitments to modernizing cities and upgrading the framework of infrastructure, steel integration is changing the way buildings and homes are constructed. For example, steel building materials with fire-retardant coatings help minimize structural losses due to fire.  

For India, steel imports drive its economy, impacting engineering, packaging, and more. To accommodate the increased demand, India raised its China steel consumption by 28X from 2022-2024; however, India’s own steel mills were forced to drop HRC (hot-rolled coil) pricing to offset slowing steel exports. 

Steel Pricing Could Jar Inventory Methods

Supply chains represent the economic flows of our time, though consistent and erratic fluctuations make gaging inventory needs and purchasing requirements challenging, even for the seasoned professional.  

What happens in the supply chain and logistics sectors can be a leading indicator of what’s to come. By staying current on steel industry news, you’ll have an advantage in knowing how to plan and navigate supply, demand, and storage. Analysts predict Iron Ore pricing to reach 94.55 per ton by the end of 2025, a near 7-point drop from first-quarter projections. 

Using a blended JIC (just in case) and JIT (just in time) inventory methodology, a hybrid approach, gives businesses the flexibility to scale for cost savings or shrink product storage levels as needed.  

Steel Logistics Bring Other Complexities

Not every warehouse or logistics company has the capability to store and load steel batches in all its forms. Many 3PLs in the South provide customers with the transloading and rail services needed to move steel products securely across the country. Specialized cranes, mechanical conveyor belts, and grounded tracks ensure safe handling from dock to railcar.  

The sensitive make up of steel requires storage guidelines be followed with recommended adjustments to navigate weather conditions and transport schedules. Cutting corners could compromise its integrity and durability.  

To get a true understanding of what a 3PL company provides and, just as important, how they treat steel products inbound and outbound involves a conversation and presenting a punch list of preferences setting expectations while alleviating risk.  

How to Prepare for Steel Import and Export Shifts

Preparation is foundational to success. To prepare for steel supply and demand shifts, there are practices involved that provide a clearer picture of short- and long-terms needs. What may have been good enough before, could always use refining.  

Consider Flexible Solutions

Instead of working with a fixed set of forecasting metrics, revisit those numbers often and play with potential scenarios (disruptions) that could impact supply and demand needs. With each possible scenario, there are consequences to your business.  

By reviewing the what-ifs and creating detailed responses, your business is better prepared when trade regulations and economic hurdles change the flow of steel imports and exports. 

Revisit the way you do logistics by: 

• Assessing storage needs 

• Changing perspectives on short- and long-term requirements 

• Staying open to new distribution channels 

• Exploring loading and storage options by adding rail services 

• Researching and comparison shopping 3PL providers 

With optionality and availability to secure efficient, safe storage and transport of steel materials, your business can adapt to whatever evolving business climates bring. 

Discover the difference a trusted, resilient, 3PL partner makes to you and your customers. Ask WSI how we can help.