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September 20, 2007

U.S., Canadian Steel and Aluminum Inventories Continue to Decline; Shipments Fall in both Countries

September 20, 2007

U.S., Canadian Steel and Aluminum Inventories Continue to Decline; Shipments Fall in both Countries

ROLLING MEADOWS, Illinois, September 20, 2007 – Service center inventories of steel and aluminum products continued their year-over-year decline in August, and shipments of both metals also fell during the month from 2006 levels, the Metals Activity Report from the Metals Service Center Institute shows.

Because shipments of industrial metals closely parallel the economy as a whole, the year-long decline in steel shipments – 12 consecutive months of year-over-year declines in the U.S., and 13 months in Canada – the report underscores the weakness of North American economic activity.

 

Steel Product Activity

Shipments of steel products from U.S. metals service centers fell 8.4%, to 4.64 million tons, compared with August 2006 shipments. Shipments for the first eight months of the year, at 36.1 million tons, are 7.8% lower than during the same period last year. In Canada, steel shipments from metals service centers totaled 315,500 tons in August, down 6.3% from a year ago. Year-to-date shipments of 2.53 million tons are down 8.0%.

U.S. steel inventories at the end of August totaled 13.0 million tons, or 18.2% below year-earlier totals. U.S. steel inventories are at their lowest level since December 2005, when inventories totaled 12.9 million tons. At current shipping rates, U.S. steel inventories represent a 2.8-month supply. In Canada, inventories of about 1.2 million tons are down 18.6% from August 2006 and at their lowest level since March 2006. At current shipping rates, this represents a 3.8-month supply.

 

Aluminum Product Activity

U.S. service centers shipped 102,400 tons of aluminum products during August, down 4.0% from August 2006 shipments. For the year through August, shipments totaled 797,200 tons of aluminum products, or 4.0% below the same period last year. Canadian service center shipments totaled 10,200 tons during the month, down 0.8% from a year ago. Canadian year-to-date aluminum shipments of 81,500 tons are 3.9% lower than during the 2006 period.

U.S. aluminum inventories totaled 302,200 tons at the end of August, or 21.7% below stockpiles at the end of August 2006. U.S. inventories are at their lowest level since March 2004, when they totaled 300,000 tons. At current shipping rates, the August inventory level represents a 3.0-month supply. In Canada, aluminum inventories totaled 28,300 tons, or 14.9% below year-ago stocks. August marked the 13thconsecutive month of year-over-year inventory declines in Canada. At current shipping rates, August inventories represent a 2.8-month supply of the metal.

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