This article was originally distributed via PRWeb. PRWeb, WorldNow and this Site make no warranties or representations in connection therewith.
The Recyclable Material Wholesaling industry will continue to surge forward, driven by strong demand from metal manufacturers that will increasingly use scrap metal as part of the production process, stimulating revenue growth, and in the five years to 2019, emerging economies will also continue demanding scrap metal to meet demand for steel in their markets, ultimately resulting in heightened scrap metal prices. For these reasons, industry research firm IBISWorld has updated a report on the Recyclable Material Wholesaling industry in its growing industry report collection.
New York, NY (PRWEB) February 15, 2014
The Recyclable Material Wholesaling industry's performance is subject to price volatility, and industry revenue growth is largely dictated by demand from downstream scrap metal manufacturers. Global demand for steel supports this market, since scrap metal is used in the production of steel. Prior to the recession, increased demand for scrap caused average annual steel and iron scrap metal prices to skyrocket, translating to higher revenue for industry operators. Conditions changed considerably during the recession, however, with excess supply and falling demand dragging prices down and putting a pinch on wholesalers. Wholesaler revenue has slowly recovered over the five years to 2014, largely due to sales of scrap metals to emerging economies. IBISWorld estimates that revenue for the Recyclable Material Wholesaling industry increased an average 4.5% annually to $64.5 billion in the five years to 2014. As global economic activity continues to ramp up, revenue is expected to grow 2.8% in 2014.
According to IBISWorld Industry Analyst Nick Petrillo, Though the industry is relatively fragmented, several vertically integrated steel manufacturers have absorbed recyclable material wholesalers to gain greater supply chain control. The pace of industry acquisitions peaked in the period leading up to the recession, though mergers and acquisitions continue to be major activities for industry leaders like Sims Metal Management, Steel Dynamics and Nucor Corporation. Surging steel prices have prompted steel manufacturers to acquire recyclable material wholesalers to widen their margins, since high steel scrap prices are positively correlated to steel-based product prices.
Overall, the industry's outlook for the next five years is strong, says Petrillo. Continued global demand for metal manufacturing will increase industrial production, which will bolster demand for the scrap metal heavy manufacturers require. Also, steel manufacturers' demand for scrap metal will increase as these players increasingly use electric arc furnaces (EAF), machines that use scrap metal instead of coal to make steel. Emerging economies will continue to demand scrap metal to meet demand for steel in their growing markets, ultimately pushing up scrap metal prices. As a result of these positive trends, industry revenue is expected to grow in the five years to 2019. There is some concern, however, over the global market price of steel. The world price of steel has been declining annually since 2012 and may squeeze industry profit margins over the five years to 2019.
For more information, visit IBISWorlds Recyclable Material Wholesaling industry in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld.
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189.
IBISWorld industry Report Key Topics
The Recyclable Material Wholesaling industry wholesales automotive scrap, industrial scrap and other recyclable materials. Industry establishments include auto wreckers that dismantle motor vehicles for the purpose of wholesaling scrap material. Also included are establishments that break up, sort and wholesale all forms of scrap iron and steel using power-processing equipment.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nations most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
For the original version on PRWeb visit: http://www.prweb.com/releases/2014/02/prweb11587074.htm
Information contained on this page is provided by an independent third-party content provider. WorldNow and this Station make no warranties or representations in connection therewith. If you have any questions or comments about this page please contact email@example.com.