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The industry’s expansion was “definitely driving up steel demand and will continue to do so,” Zekelman told Fastmarkets in the week to Monday March 30.
The US is by far the world’s dominant and pre-eminent participant in the data center industry, giving American producers of steel and steel parts a front-line position in the supply chain.
The steel needed for the data center construction boom “is pretty massive — it’s all over the place,” Zekelman said.
“It’s not only hollow structural steel and beams, it’s all different types of steel and other materials,” he said.
“There’s all of the lead-up that goes into the building, which [includes] conduit and electrical sourcing for that, whether it’s solar or gas lines or your generation stations that are powering it,” he added.
Then there are “the beams and tube that build the building, the other substrate that goes around it, whether it’s paneling or roof, decking or joist; the electrical conduit, the massive amounts of closed loop water systems that have to run through the servers to cool them, including a lot of A53 pipe,” Zekelman said.
“As you get down into the processing units, there is small diameter stainless steel pipe that has to run very clean water right at the processor level through heat exchangers,” he said.
The potential global capital expenditure investment in data center expansion from now until 2030 was estimated to be a jaw-dropping sum of $3 trillion, according to Jones Lang Lasalle (JLL), a Chicago-based firm specializing in commercial real estate and investment management.
In a report released in January, JLL forecast that the global data center sector would “effectively double in size” and grow from 97 gigawatts in 2025 to 200GW in 2030.
The majority of that growth will come from the faster growing Americas region, which currently represented 50% of global capacity, with nearly all of that concentrated in the US, according to JLL.
The Americas region was expected to increase capacity at a compound annual growth rate (CAGR) of 17% to 109GW in 2030 from 49GW in 2025, JLL said, raising its global share to 54.5% by 2030.
The Asia-Pacific, South Asia, Southeastern Asia and Australia regions, meanwhile, were forecast to grow at a CAGR of 12% to 57GW in 2030 from 32GW in 2025.
The Europe, Middle East and Africa regions would grow at a 10% CAGR, rising to 34GW from 21GW.
AI will steadily expand its share of data processing activity at the same time, rising to nearly half of workload activity in 2030 from 23% of workload activity in 2025, according to JLL.
Steel industry sources, however, were uncertain about how data center steel demand would develop.
“Data centers are a big [source for] demand right now, but a lot of communities in the US are fighting against them moving into their neighborhoods,” a distributor said. “So, I am not sure how sustainable that will be.”
A second distributor, however, was waiting to see the level of demand, “I know data center projects for 2026 and beyond are going to help the steel industry with large demand for beams and plate and some pipe,” he said. “I just do not know how soon.”
Zekelman acknowledged concerns about the strength and duration of the demand.
“We know it’s a little bit of a bubble, because everyone’s racing to be the biggest, the quickest, and then to see where it washes out,” he said. “So you’ll definitely see some of the ‘froth’ come off of this. But even with that, it’s going to go on for a long, long time.”
Growth will remain strong despite the pushback, according to a February report from Cushman & Wakefield, a US real estate broker and service company.
“The defining theme of the market’s next phase is managed growth, rather than unconstrained acceleration,” the real estate company said. “Governments, utility companies and local jurisdictions are introducing new regulatory guardrails and infrastructure requirements designed to oversee power demand, land and natural resource use, and long-term grid stability.”
Despite those concerns, Cushman & Wakefield found that “demand fundamentals remain exceptionally strong” with capacity under construction in the Americas at 25.3GW, with 94% of that in the US.
Pre-commitment rates were nearing 89% with vacancy rates at 4.2%, near historic lows, according to Cushman & Wakefield.
The top ten data center states in the US are Virginia, with 579 centers; Texas, 411; California, 289; Illinois, 232; Georgia 214; Ohio, 201; Arizona, 163; New York, 133; Oregon, 123; and Florida, 108, according to Data Center Maps.
New construction could result in Texas overtaking Virginia as the largest US global data center state by 2030, according to JLL.
Zekelman also highlighted the goal of maintaining carbon neutrality in data center activity.
“We’ve got to have clean and green steels with low carbon content, because that’s what the customers are asking for,” he said.
“They’re going to build a carbon-neutral type of operation, so they’re looking for the best solutions for that, and that goes all the way through the ‘food chain’ [and includes] everything from conduit to pipe to beam to tube and even the wire they use,” Zekelman said.
Data center steel demand also presented a challenge to the US fabrication industry to build the systems required for new data center facilities, according to Zekelman.
“There’s huge pressure on the fabrication companies that are out there, because they just do not have enough space and enough talent to get stuff fabricated in time,” Zekelman said. “They want their buildings built, and they’ll go elsewhere to have it fabricated – and that means offshore. And we do not want that.”
The challenge for the US steel industry was “to figure out more efficient ways to do this, quicker lead times on getting the product to the fabricator,” he said.
“We have to assure them that we’re going to have enough capacity to meet their long-term needs and demands, and sign up for that, and give them consistent pricing,” he said. “So, there’s a huge opportunity here, but none of us can ‘drop the ball’.”
There was, however, no guarantee that US steelmakers would fully benefit from the opportunity provided by the expansion of the data center industry, according to Zekelman.
“It’s not just supplying the steel. You know we’re not going to sell steel if someone cannot fabricate it and someone cannot build the building,” he said. “So, we have to make sure that everybody we’re dealing with is capable of absorbing this demand and actually put it into play.
“I think there’s challenges there,” Zekelman said, “and we’ve got to really, really move quickly to make sure we can do that.”
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