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February 19, 2007

Steel Shipments Remain Below 2006 Levels as Inventory Correction Continues; Aluminum Market Shows Signs of Expansion

February 19, 2007

Steel Shipments Remain Below 2006 Levels as Inventory Correction Continues; Aluminum Market Shows Signs of Expansion

ROLLING MEADOWS, Illinois, February 19, 2007 – January shipments of steel products from metals service centers in the United States and Canada declined from year-ago levels again in January, the Metals Activity Report prepared by the Metals Service Center Institute shows. Large steel inventories declined in both countries.

Shipments of aluminum products rose in the United States and were up slightly in Canada on a year-over-year basis.

 

Steel Product Activity

U.S. metals service centers shipped nearly 4.7 million tons of steel products in January, a decrease of 2.5% from January 2006. At the end of January, steel inventories were 16.3 million tons, up 24.1% from a year ago but down 1.5% from December. At the current shipping rate, this represents a 3.5-month supply, up 27.3% from last year but down 26.4% from last month, when inventories equal to a 4.7-month supply tied the months-on-hand record. That figure was exacerbated by the seasonally low volume typical of mid-winter shipments.

Steel shipments from Canadian metals service centers totaled 337,000 tons in January, a decrease of 4.6% from a year earlier. Steel product inventories at the end of January were 1.25 million tons, 21.8% higher than last year but a decrease of 0.7% from last month. At the current shipping rate, this represents a 3.7-month supply, an increase of 27.6% from a year ago but a decrease of 30.5% from December.

 

Aluminum Product Activity

U.S. service center shipments of aluminum products totaled 105,000 tons, or 2.4% more than January 2006 shipments. Inventories were 367,100 tons, or 3.9% higher than a year ago, although 2.6% lower than at the end of December. At the current shipping rate, this represents a 3.5-month supply, 1.4% higher than January 2006 while a decrease of 19.5% from December.

Canadian aluminum shipments totaled 10,200 tons, or 0.3% more than January 2006. Month-end inventories totaled 30,600 tons, down 4.0% from a year ago but 4.3% higher than at the end of December. At the current shipping rate, this represents a 3.0-month supply, down 4.3% from a year ago and a decrease of 12.9% from last month.

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, Readmore Communications, (847) 485-3011

sweiner@msci.org