Metals Industry Update Q2 2026

The US metals market carried strong momentum into Q2 2026. Manufacturing activity sustained expansion throughout the quarter, with the S&P Global US Manufacturing PMI strengthening through April and May before moderating slightly in June. The quarter's strength was driven by underlying demand, alongside forward purchasing as customers sought to secure material ahead of rising costs and tightening supply.

Trade policy continued to shape procurement decisions across the metals value chain. The Section 232 tariff regime further encouraged domestic sourcing and reduced the competitiveness of foreign material. Consistent with this backdrop, the American Iron and Steel Institute reported a decline of 23.1% and 24.3% in total and finished steel imports, respectively, through H1 2026, keeping the finished import market share at 16% YTD. This supported domestic producer pricing power while elevating cost pressure for downstream players.

End-market demand exhibited healthy trends. Non-residential planning & construction improved throughout the majority of Q2, led by massive data center buildout and supported by transportation infrastructure, office, healthcare, manufacturing facility, and utility projects. Automotive demonstrated resilience despite ongoing economic and policy uncertainty. According to Cox Automotive’s preliminary estimates, US new vehicle sales rose ~7.2% Y-o-Y in June, with the full-year 2026 outlook standing largely consistent with initial expectations.

Interest rates and inflation continued to influence business and investment decisions. The Fed held the interest rate unchanged in June, citing still-elevated inflation, with rising energy prices associated with Middle East tensions adding to cost pressures.

Looking ahead, while inflation eased in June following the US-Iran interim peace agreement, expectations for additional monetary tightening weigh on market sentiment. At the same time, growing global steel overcapacity and the evolving export-related trade policies of China and Brazil remain key themes to monitor, particularly for their potential impact on US metal competitiveness.