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October 16, 2007

Steel and Aluminum Shipments and Inventories Continue their Slide in United States, Canada

October 16, 2007

Steel and Aluminum Shipments and Inventories Continue their Slide in United States, Canada

ROLLING MEADOWS, Illinois, October 16, 2007 – Demand for metals in the United States and Canada softened further in September, and metals service centers continued to reduce inventories to bring supplies into better alignment with the weaker-than-expected economy and seasonal low order rates, the Metals Activity Report from the Metals Service Center Institute shows. In some cases, inventories reached five-year lows.

September shipments of both steel and aluminum declined from year-ago levels in both countries.

 

Steel Product Activity

Shipments of steel products from U.S. metals service centers totaled 4.02 million tons in September, down 8.1% from September 2006 and the 13th consecutive month of year-over-year shipment declines. Year-to-date steel shipments of 40.1 million tons are 7.9% lower than the first nine months of last year. Canadian steel shipments of 296,100 tons were 8.9% below year-earlier totals, marking the 14th consecutive month of year-over-year declines there. Canadian steel shipments during the first nine months of the year totaled 2.8 million tons, down 8.1% from the 2006 period.

At the end of September, U.S. steel product inventories totaled 12.56 million tons, the lowest level since November 2005 and 24.3% lower than inventories in September 2006. At current shipping rates, that represents a 3.1-month supply. Canadian inventories of 1.13 million tons were 23.4% lower at the end of September than a year earlier, but at current shipping rates, still represented a 3.8-month supply.

 

Aluminum Product Activity

September shipments of aluminum products from U.S. metals service centers totaled 89,000 tons, down 16.1% from September 2006 and the lowest level since last December. Shipments for the first nine months of the year totaled 886,100 tons, 5.4% lower than the 2006 period. In Canada, aluminum product shipments of 10,700 tons were essentially flat, off 0.1% from a year ago. Year-to-date shipments are off 3.5% at 92,100 tons.

U.S. aluminum inventories at the end of September totaled 272,000 tons, down 29.9% from a year ago and at the lowest level since June 2002. At current shipping rates, aluminum stocks represented a 3.1-month supply. In Canada, aluminum inventories of 26,700 tons slipped to their lowest level since June 2004 and were down 18.6% from last year. At current shipping rates, Canadian aluminum inventories were sufficient to last 2.5 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.

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, cmarti@msci.org

Steve Weiner (847) 485-3011, sweiner@msci.org