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Domestic Metal Centers Continue to Destock

Inventories of steel and aluminum products at North American metals service centers continued to decline in July, according to the latest Metals Activity Report from the Metals Service Center Institute. Ongoing destocking in both the United States and Canada was underscored by continuing year-over-year shipment declines for both steel and aluminum, with the rate of decline narrowing most significantly in Canada.

According to the report, steel product shipments from U.S. metals service centers totaled 2.5 million tons in July, a 39.4% decrease in volume vs. July 2008. For the first seven months of 2009, U.S. service center steel shipments totaled nearly 17.3 million tons, a 43.3% decline from the same period last year. By the end of July, U.S. steel inventories totaled 5.7 million tons, 47.7% lower than a year ago. At the current shipping rate, this volume equals a 2.3-month supply.
 
In Canada, steel shipments from metals service centers totaled 398,500 tons of steel in July, a 23.8% decrease vs. July 2008. Shipments for the first seven months of the year totaled about 2.9 million tons, 33.7% decrease vs. shipments for the same period last year. By the end of July, Canadian inventories totaled 999,000 tons, a 35.4% decrease from last year. At current shipping rates, this volume is equal to a 2.5-month supply.

Aluminum product shipments from U.S. metals service centers totaled 89,700 tons in July, a decline of 39% from a year ago. For the first seven months of 2009, U.S. metal center shipments of aluminum totaled 614,200 tons, a 42.6% decline from the same period last year. By the end of July, aluminum inventories totaled 266,500 tons, or 42.5% below inventories at the same time last year. At current shipping rates, U.S. aluminum stocks were equal to about a 3.0-month supply.
 
In Canada, metals service centers shipped 9,700 tons of aluminum in July, or 20.8% fewer tons than during July 2008. Canadian service centers shipped 74,900 tons of the metal during the first seven months of the year, down 25.7% from a year ago. Month-end inventories totaled 30,600 tons of aluminum, equal to 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.
 
Founded in 1909, the Metals Service Center Institute has more than 375 members operating from about 1200 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 55 million tons of steel, aluminum, and other metals, with about 300,000 manufacturers and fabricators as customers. MSCI’s membership also includes most ferrous and non-ferrous industrial metals producers in North America. Metals service centers inventory and distribute metals and provide first-stage fabrication services.