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January 18, 2007

Steel Shipments Declined in December in the U.S., Canada

January 18, 2007

Steel Shipments Declined in December in the U.S., Canada

ROLLING MEADOWS, Illinois, January 18, 2007 – Reflecting a continued slowdown in general economic activity, steel product shipments from U.S. and Canadian metals service centers fell sharply in December from the same month a year ago. But U.S. shipments for the full year nonetheless set a new record of 56 million tons, the Metals Activity Report from the Metals Service Center Institute shows.

The inventory correction is continuing. Year-end steel inventories declined slightly from November totals in both the United States and Canada. Last year was another year of growth in aluminum shipments in both the U.S. and Canada. However, December shipments of aluminum products fell on a year-over-year basis in the United States but rose slightly in Canada. Aluminum inventory levels were mixed.

U.S. Service Center Activity

Steel shipments fell 10% in December compared with December 2005, to about 3.5 million tons. The full-year shipment total of 56 million tons was 2.4% higher than total shipments for 2005 and exceeded the previous annual shipping record of 55.6 million tons set in 2004. Year-end steel product inventories were 16.5 million tons, or 28% more thanat the end of 2005. At the current shipping rate, this represents a 4.7-month supply, an increase of 42.2% from a year ago and an increase of 23.6% from November 2006.

December aluminum product shipments totaled 86,800 tons, down 4.3% from December 2005. Aluminum shipments for the full year were 1.2 million tons, also a new annual record and 2.7% more than in 2005. Aluminum inventories ended the year at 376,800 tons at U.S. metals service centers, up 6.9% from the end of 2005, but 2.9% lower than in November. At the current shipping rate, this represents a 4.3-month supply, an increase of11.6% from last year and 5.3% from last month.

Canadian Service Center Activity

December steel shipments from Canadian metals service centers totaled 235,800 tons, a decrease of 12.6% from the same month a year ago and well below seasonal expectations. Poor weather in western Canada contributed to the decline. Full year 2006 steel shipments totaled 3.9 million tons, down 4.7% from 2005. Year-end steel inventories of nearly 1.3 million tons were 27.8% higher than a year-ago but down 2.6% from November. At the current shipping rate, this represents a 5.3-month supply of steel, up 46.2% from the end of 2005 and 33.1% higher than November 2006.

Aluminum shipments totaled 8,500 tons, just 0.7% greater than December 2005 shipments. Full-year 2006 aluminum shipments totaled 124,700 tons or 3.3% more than last year. Aluminum inventories at the end of the year were 29,400 tons, down 8.1% from a year ago and 4.6% lower than at the end of November. At the current shipping rate, this represents a 3.5-month supply, a decrease of 8.7% from a year ago, but a 14.2% increase from last month.

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 cmarti@msci.org

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