August 16, 2007

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

August 16, 2007

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

ROLLING MEADOWS, Illinois, August 16, 2007 – Inventories of steel and aluminum products continued to fall at U.S. and Canadian metals service centers in July, reflecting sluggish summer demand and the uncertain economic environment, the Metals Activity Report from the Metals Service Center Institute shows. Despite the continuing declines, inventories expressed in terms of months of supply on hand have not yet reached the lows seen in other inventory cycles.

Steel inventories at U.S. metals service centers fell to 13.4 million tons at the end of July, 12% lower than the same month a year ago and the lowest level since February 2006. Despite the decline, steel stockpiles remained well above the cyclical low for U.S. steel inventories of 12.5 million tons reached in November 2005. U.S. aluminum inventories, at 314,300 tons, were off 16.7% from a year ago and at their lowest level since May 2004.

Canadian service center steel inventories dropped to their lowest level since May 2006, while aluminum stockpiles were at their lowest levels since June 2004.


Steel Product Activity

Shipments of steel products from U.S. metals service centers totaled nearly 4.2 million tons, 6.3% lower than volume in July 2006. This marked the 11th consecutive month of year-over-year U.S. steel shipment declines. At current declining shipping rates, U.S. steel inventories at the end of July were sufficient for 3.2 months of shipments, unchanged from June.

Steel shipments from Canadian service centers were 270,200 tons in July, down 9.6% from a year ago and the 12th consecutive month of year-over-year shipment declines. Canadian steel inventories of nearly 1.2 million tons, down slightly from June, were 12% lower than in July 2006 and, at current shipping rates, represented a 4.4-month supply.


Aluminum Product Activity

U.S. metals service center shipments of aluminum products totaled 94,500 tons in July or 3.5% more than in the year-earlier month, marking the only positive number for the month. At current shipping rates, inventories represented a 3.3-month supply.

Canadian service centers shipped 8,900 tons of aluminum during July, down 1.9% from a year ago. Inventories fell to 26,800 tons, 20.3% lower than July 2006, and equal, at current shipping rates, to a 3.0-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. 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.



Chris Marti, vice president, research (847) 485-3009, cmarti@msci.org

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