Metals Industry Update Q4 2025

The US metals sector closed Q4 amid a broadly favorable backdrop. Manufacturing indicators continued to improve steadily, though producers at times saw output rise faster than orders. Financial conditions became slightly more supportive as borrowing costs eased, reducing some of the financing pressure associated with carrying inventories and planning capital intensive projects.

Tariff developments continued to shape procurement decisions. The broader application of tariffs across a wider range of imported goods encouraged greater reliance on domestic alternatives. In addition, exemptions for Brazilian pig iron and iron ore pellets helped electric arc furnace (EAF) operators keep melt mixes stable despite other constrained import channels.

The recent government shutdown contributed to a brief softening of steel demand as certain federally linked infrastructure projects slowed and timelines extended, creating a temporary headwind for metal shipments tied to public-sector construction activity.

However, rising institutional building activity and the growing demand for robust data center infrastructure to support rapid AI adoption continued to drive strong demand for structural metals and other fabricated products. Also, the automotive market was characterized by varied dynamics as OEMs recalibrated strategy and production in response to the expiration of EV incentives, although the hybrid vehicle market remained comparatively resilient.

Finally, the World Steel Association’s latest outlook suggests moderately favorable guidance for 2026. It anticipates a modest 1.8% improvement in US steel demand, supported by pent-up residential activity, improving financial conditions, and the “One Big Beautiful Bill¹.” However, policy shifts, political developments, and macroeconomic conditions will shape how the year ultimately unfolds.