Steel, Aluminum Inventories Dropped Briskly in May As Demand Slowed in Canada and the United States
June 18, 2007
Steel, Aluminum Inventories Dropped Briskly in May As Demand Slowed in Canada and the United States
ROLLING MEADOWS, Illinois, June 18, 2007 – With demand for industrial metals softening, inventories of steel and aluminum products at metals service centers in the United States and Canada fell during May in a range of 2% to 5% from April’s levels, the Metals Activity Report from the Metals Service Center Institute shows.
Steel shipments fell from May 2006 levels in both countries, with the U.S. shipment decline of 11.3% reflecting, in part, difficult comparisons with unseasonably high growth in steel shipments a year ago. Steel shipments from Canadian service centers continued to be adversely affected by the strong Canadian dollar. Rebalancing of inventories to match soft demand continued in both countries.
Steel Product Activity
May steel shipments from U.S. metals service centers totaled nearly 4.7 million tons, down 11.3% from the 2006 month. Year-to-date shipments of 22.9 million tons are down 6.6% from the same period last year. U.S. steel product inventories at the end of May were nearly 14.1 million tons, down 1.6% from inventories at the end of May 2006. At current shipping rates, steel supplies were sufficient for 3.0 months, the lowest months-on-hand figure since June 2006.
Steel shipments from Canadian service centers totaled 338,800 tons, 10.9% lower than May shipments a year ago. Steel shipments for the year to date are down 6.9%, to 1.6 million tons. Canadian inventories of steel products totaled almost 1.3 million tons at the end of May, or 4.8% higher than a year ago – the lowest level of inventories in a year. At current shipping rates, Canadian steel stocks were sufficient to last 3.7 months.
Aluminum Product Activity
U.S. aluminum product shipments fell 8.7% from May 2006, to 98,100 tons. So far this year, aluminum shipments are down 4.1%, to 503,600 tons. Inventories fell to 2.1% below year-earlier levels, at 345,300 tons of aluminum, marking the first time since June 2006 that inventories were lower than those of the same month in the previous year. At current shipping rates, aluminum stocks were sufficient to cover 3.5 months of shipments.
Canadian aluminum shipments fell 8.1% in May, to 10,700 tons, while year-to-date shipments, at 50,900 tons, are down 5.2% from year-ago levels. Inventories dropped 11.6% below May 2006 stocks, to 28,400 tons, sufficient at current shipping rates for 2.7 months.
The Metals Activity Report (MAR), based on data from metals service centers in the United States and Canada, is produced by the Metals Service Center Institute and a third-party econometrics and strategy firm, McCoy, Scott & Co. MSCI tracks the relationships between many external economic variables and MAR shipment levels on a regular basis. The statistical validity of these relationships describes the credibility of the MSCI data and the importance of the metals distribution channel to the manufacturing economy as a whole.
About MSCI
Founded in 1909, the Metals Service Center Institute has more than 420 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.
Contacts:
Chris Marti, vice president, research (847) 485-3009 or 708-280-2904, cmarti@msci.org
Steve Weiner (847) 485-3011, sweiner@msci.org