August 22, 2008

US and Canadian service center activity continue decline in August

The Metals Activity Report from US based Metals Service Center Institute showed that service center inventories of steel continued their YoY decline in August and shipments also fell during the month from 2006 levels. Because shipments of industrial metals closely parallel the economy as a whole, the year long decline in steel shipments 12 consecutive months of YoY declines in the US and 13 months in Canada, the report underscores the weakness of North American economic activity.

Shipments of steel products from US metals service centers fell by 8.4% YoY to 4.64 million tons in August 2007. Shipments for the first eight months of the year at 36.1 million tons are also 7.8% YoY lower than during the same period last year. US steel inventories at the end of August totaled 13 million tons or 18.2% below year earlier totals. US steel inventories are at their lowest level since December 2005, when inventories totaled 12.9 million tons. At current shipping rates, US steel inventories represent a 2.8 month supply.

In Canada, steel shipments from metals service centers totaled 315,500 tons in August 2007 down by 6.3% YoY and year to date shipments of 2.53 million tons are down by 8% YoY. In Canada, inventories of about 1.2 million tons are down by 18.6% from August 2006 and at their lowest level since March 2006. At current shipping rates, this represents a 3.8 month supply.

Founded in 1909, the Metals Service Center Institute has more than 420 members operating from about 1,200 locations in the US, Canada, Mexico, and elsewhere in the world. The Metals Activity Report, 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.