May 15, 2007

U.S. Metals Shipments and Inventories Decline

May 15, 2007

U.S. Metals Shipments and Inventories Decline

ROLLING MEADOWS, Illinois, May 15, 2007 – With economic activity and shipments slowing, U.S. metals service centers continued in April with a steady liquidation of steel and aluminum inventories, the Metals Activity Report (MAR) from the Metals Service Center Institute (MSCI) shows. In Canada, the service center inventory correction for both steel and aluminum appears to have ended.


Steel Product Activity

U.S. April steel shipments of 4.5 million tons were 1.5% lower than year-earlier volume, marking the eighth consecutive month of year-over-year monthly shipment declines. Shipments for the first four months of 2007, at 18.2 million tons, were 5.4% lower than during the same period in 2006. Steel inventories declined for the sixth consecutive month, to 14.6 million tons, the lowest level since May 2006, although still 4.5% greater than the April 2006 inventory total. At current shipping rates, steel product inventories represent a 3.2-month supply, up slightly from March.

April shipments from Canadian service centers totaled 308,100 tons of steel products, down 5.9% from the 2006 month and the ninth consecutive month of year-over-year shipment decreases. Year-to-date shipments of nearly 1.3 million tons were down 5.8% in Canada. But steel inventories rose slightly from March levels, to 1.29 million tons, up 17.7% from a year ago and, at current shipping rates, equal to a 4.2-month supply.


Aluminum Product Activity

U.S. aluminum product shipments totaled 94,000 tons in April, down 3.7% from the same month in 2006. Shipments for the first four months, of 405,500 tons, are down 2.9% from year-earlier shipments. U.S. aluminum inventories declined slightly in April to 353,100 tons, down 12,700 tons from the end of March, but remained 2.0% higher than April 2006. At current shipping rates, inventories equaled a 3.8-month supply, up from 3.3 months at the end of March.

Canadian aluminum shipments in April totaled 9,700 tons, or 4.8% lower than April 2006. Shipments so far this year are down 4.4%, to 40,200 tons. But inventories at the end of April were up slightly, to 29,900 tons, or 500 tons more than at the end of March. Despite that tiny uptick, inventories remain 5.6% below year-ago levels. At current shipping rates, Canadian aluminum inventories represent a 3.1-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.


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.


Chris Marti, vice president, research (847) 485-3009 or 708-280-2904

Steve Weiner, Readmore Communications, (847) 485-3011