Steel, aluminum inventories decline in U.S. and Canada

Consistent with slowing demand indicative of a correspondingly slower economy, inventories of steel and aluminum at North American metals service centers declined in November, the Metal Service Center Institute's Metals Activity Report (MAR) said on December 15.

Because metals service center shipments so closely parallel the broader manufacturing economy, the November results indicate a weaker undertone to metals-related economic activity. They also provide further evidence that industrial metals inventories may have passed their cyclical peak.

Steel inventories at U.S. service centers registered their first monthly decline since November 2005, when the current cycle’s inventory building phase began. Aluminum inventories at U.S. service centers fell for the first time since March 2006. Aluminum and steel inventories also continued to decline at Canadian service centers.

U.S. Service Center Activity
November steel shipments from U.S. metals service centers totaled 4.33 million tons, down 3.3 percent from the same month in 2005. Shipments for the first 11 months of the year of 52.5 million tons were 3.3 percent higher than the same period last year. Steel inventories at the end of November were 16.6 million tons, down 1.0 percent from October, but 33.0 percent higher than a year ago. At the current shipping rate, steel inventories represent a 3.8-month supply, 5.7 percent higher than October 2006 and an increase of 37.7 percent from last year.

Aluminum shipments during November totaled 94,100 tons, down 0.1 percent from last year. Year-to-date shipments of 1.13 million tons are up 3.2 percent from a year ago. Aluminum inventories at the end of November totaled 388,200 tons, down 1.1 percent from October but 10.7 percent larger than a year ago. At the current shipping rate, service centers had enough aluminum on hand to last 4.1 months, an increase of 10.9 percent from last year and 11.7 percent from last month.

Canadian Service Center Activity
Steel shipments from Canadian service centers totaled 322,400 tons, down 14.2 percent from November 2005. For the year to date, steel shipments of 3.73 million tons are down 4.2 percent from 2005 period. Steel inventories of 1.29 million tons were down 6.4 percent from last month but were 31 percent higher than November 2005. At the current shipping rate, Canadian steel inventories represent a 4.0-month supply, a decrease of 2.1 percent from last month, but 52.6 percent greater than last year.

Canadian service centers shipped 10,200 tons of aluminum products in November, up just 0.1 percent from November last year. Year-to-date shipments total 116,200 tons of aluminum or 3.5 percent more than the same period last year. Aluminum inventories totaled 30,800 tons at the end of November, a 6.5 percent decrease from a year ago and a decrease of 6.7 percent from last month. At the current shipping rate, this represents a supply sufficient for 3.0 months, down 6.5 percent from last year and a decrease of 2.9 percent from October.