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December 17, 2008

Steel, Aluminum Shipments Fall Sharply in November in the United States and Canada; Inventories Shrink

December 17, 2008

Steel, Aluminum Shipments Fall Sharply in November in the United States and Canada; Inventories Shrink

ROLLING MEADOWS, Illinois, December 17 – The turmoil unleashed by the housing and financial crisis continues to infiltrate deeper into the economies of the U.S. and Canada, sharply reducing metals service center shipments. Service center shipments of steel fell 32.7% in the U.S. and 30% in Canada in November as customers stayed in a wait and see mode. The last time year-over-year steel shipments declined by this magnitude was the 1980-82 recession period, the Metals Activity Report from the Metals Service Center Institute shows.

Metals inventories also fell, with U.S. steel inventories at the end of November at their lowest level in nearly 13 years, and Canadian steel inventories at the lowest level since the statistical series began with January 1995 data.

Steel Product Activity

Shipments of steel products from U.S. metals service centers fell 32.7% from year-earlier levels to about 2.71 million tons in November. That brought total U.S. service center steel shipments for the first 11 months of the year to 44.4 million tons, or 9.3% below the same period in 2007. Inventories at the end of the month of 9.1 million tons were down 11% from November 2007. At current shipping rates, inventories equaled a 3.4-month supply of steel, up sharply from October’s days of supply because shipping volumes have dropped so low.

November shipments of steel products from Canadian metals service centers totaled 449,000 tons, down 30.2% from the same month last year. Year-to-date shipments in Canada total 6.4 million tons, a decline of 9.7% from the 11-month 2007 period. Canadian service centers ended November with 1.2 million tons of steel products on hand, a decline of 28.1% from last November. That was equal to a 2.7-month supply.

Aluminum Product Activity

November shipments of aluminum products from U.S. service centers totaled 98,300 tons, down 31.9% from November 2007 volume. U.S. shipments of aluminum for the first 11 months of the year total 1.59 million tons, a decline of 8.5% from last year. U.S. inventories of aluminum products at the end of November totaled 367,300 tons, down 16% from November 2007 inventories. At current shipping rates, that equals a 3.7-month supply of the light metal.

In Canada, metals service centers shipped 12,700 tons of aluminum products in November, a decline of 10.6% from a year ago. Year-to-date shipments total 155,900 tons, off 2.6% from the 11-month period of 2007 in Canada. Canadian service center aluminum inventories at the end of the month totaled 35,000 tons, 15.8% lower than at the same time last year. At current shipping rates, inventories equaled a 2.8-month supply.

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.

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 60 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

cmarti@msci.org

Steve Weiner (503) 646-9108

sweiner@msci.org