Point of view: the demand for flat rolled products in the USA depends on data centers
U.
S. steel market participants enter 2026 with a mix of cautious optimism and lingering concerns about future demand, driven by the industry's potential over-reliance on the data center construction boom.
Buyers and factories have commonly cited data center construction as the most efficient steel consumption sector in recent months. Some steel buyers reported that customers related to the construction of data centers have already placed their orders for most of next year.
The latest spending on data center construction was a seasonally adjusted $41.4 billion year-on-year in August, up 26% from August 2024, according to data from the U.
S. Census Bureau.
The expected increase in data center construction in 2026 also provided another opportunity for steel demand to grow through energy development. Data centers require high energy costs, which requires businesses and local authorities to take an integrated approach to using new energy sources.
Steel mills and buyers have highlighted the energy sector as a current and future source of demand for steel, even after President Donald Trump's tax and spending reconciliation bill eliminated subsidies for green energy.
However, there are some caveats due to the data center boom and broader issues related to steel demand in the rest of the economy.
Although the construction of data centers is growing year after year, cost growth slowed by a seasonally adjusted 63% in the 12 months to August 2024.
Demand, meanwhile, may rise slightly above the 2025 level in almost all other steel demand sectors.
Construction of non-residential buildings in August 2025 decreased by 1.5% year-on-year, seasonally adjusted, according to the U.
S. Census Bureau. Steel buyers said that most of the construction work, in addition to data centers, is in poor condition.
Factories have touted the opportunity to capture more market share in the U.
S. auto industry after the Article 232 steel tariffs, which were raised to 50% by the Trump administration in June, blocked steel imports from countries such as Canada.
Imports of hot-rolled steel (HRC), cold-rolled steel (CRC) and hot-dip galvanized steel (HDG) totaled 3.3 million tons year-on-year through September 2025, down 38% from the 4.9 million tons imported during the year. at the same time in 2024, according to the Census Bureau. According to the American Institute