December 15, 2006

Steel, Aluminum Inventories Decline in U.S. and Canada

December 15, 2006

Steel, Aluminum Inventories Decline in U.S. and Canada

ROLLING MEADOWS, Illinois, December 15, 2006 – Consistent with slowing demand indicative of a correspondingly slower economy, inventories of steel and aluminum at North American metals service centers declined in November, the Metal Service Center Institute’s Metals Activity Report (MAR) says.

Because metals service center shipments so closely parallel the broader manufacturing economy, the November results indicate a weaker undertone to metals-related economic activity. They also provide further evidence that industrial metals inventories may have passed their cyclical peak.

Steel inventories at U.S. service centers registered their first monthly decline since November 2005, when the current cycle’s inventory building phase began. Aluminum inventories at U.S.service centers fell for the first time since March 2006. Aluminum and steel inventories also continued to decline at Canadian service centers.


U.S. Service Center Activity

November steel shipments from U.S. metals service centers totaled 4.33 million tons, down 3.3% from the same month in 2005. Shipments for the first 11 months of the year of 52.5 million tons were 3.3% higher than the same period last year. Steel inventories at the end of November were 16.6 million tons, down 1.0% from October, but 33.0% higher than a year ago. At the current shipping rate, steel inventories represent a 3.8-month supply, 5.7% higher than October 2006 and an increase of 37.7% from last year.

Aluminum shipments during November totaled 94,100 tons, down 0.1% from last year. Year-to-date shipments of 1.13 million tons are up 3.2% from a year ago. Aluminum inventories at the end of November totaled 388,200 tons, down 1.1% from October but 10.7% larger than a year ago. At the current shipping rate, service centers had enough aluminum on hand to last 4.1 months, an increase of 10.9% from last year and 11.7% from last month.


Canadian Service Center Activity

Steel shipments from Canadian service centers totaled 322,400 tons, down 14.2% from November 2005. For the year to date, steel shipments of 3.73 million tons are down 4.2% from 2005 period. Steel inventories of 1.29 million tons were down 6.4% from last month but were 31% higher than November 2005. At the current shipping rate, Canadian steel inventories represent a 4.0-month supply, a decrease of 2.1% from last month, but 52.6% greater than last year.

Canadian service centers shipped 10,200 tons of aluminum products in November, up just 0.1% from November last year. Year-to-date shipments total 116,200 tons of aluminum or 3.5% more than the same period last year. Aluminum inventories totaled 30,800 tons at the end of November, a 6.5% decrease from a year ago and a decrease of 6.7% from last month. At the current shipping rate, this represents a supply sufficient for 3.0 months, down 6.5% from last year and a decrease of 2.9% from October.


About MSCI

Founded in 1907, the Metals Service Center Institute has more than 400 members operating from about 1,200 locations in the U.S., Canada, Mexico, and elsewhere in the world. Together, MSCI members constitute the largest single group of metals purchasers in North America, amounting each year to more than 65 million tons of steel, aluminum, and other metals, with about 300,000 manufacturers and fabricators as customers. MSCI’s membership also includes almost all ferrous and non-ferrous industrial metals producers in North America. Metals service centers inventory and distribute metals and provide first-stage fabrication services.