The slower rate of slower rate of steel and aluminum shipments may not be unsual for August but the rising level of inventories for both metals should be concerning to metal service centers

The slower rate of slower rate of steel and aluminum shipments may not be unsual for August, but the rising level of inventories for both metals should be concerning to metal service centers.

Service Centers Shipments Falling, Inventories Rising

Lone bright spot in August data is positive year-to-date results for steel, aluminum delivery volumes  U.S. steel deliveries, -1.8% U.S. aluminum deliveries, -3.5% Canada steel deliveries, -5.3 Canada aluminum deliveries, -6.5%

While August frequently delivers weak results in manufacturing, North America’s metal service centers reported deliveries for steel and aluminum slowing and inventories rising during the past month, indicating a continuing lack of momentum for regional industrial activity. The Metals Service Center Institute reported its U.S. and Canadian members’ shipments were “stagnant” during August, and though the year-over-year comparisons were mostly to the positive, the only real highlights of the monthly report may be seen in the year-to-date delivery volumes.

The figures are contained in MSCI’s monthly Metals Activity Report, a compilation of shipment and inventory data for service centers in the U.S. and Canada.

U.S. service centers shipped 3.6 million tons of steel products during August, 1.8% less than during July and only slightly more (+0.03) than during August 2013. With 29.3 million tons of steel shipped in total for the eight months of 2014, the U.S. center’s are 4.0% ahead of their 2013 volume.

As for inventories, the U.S. centers reported 9.0 million tons of steel products in stock, 3.1% more than during July and 13.5% more than during August 2013. At the current delivery rate, MSCI estimated this to represent a 2.5-month supply of steel in inventory.

In Canada, service centers’ steel deliveries totaled 456,600 tons during August, or 5.3% less than during July and 4.6% less than during August 2013. The year-to-date steel shipments from Canadian centers stand at 3.9 million tons, or 0.5% less than for the January-August 2013 period.

Steel inventories at Canada’s service centers totaled 1.49 million tons as August ended, rising 2.15% over the July total and 8.0% over the August 2013 total. At their current rate of deliveries, MSCI estimated Canadian service centers have 3.3 months worth of steel in stock.

Aluminum shipments from U.S. service centers declined 5.3% from July to August, totaling 135,200 tons, which is 1.6% more than the August 2013 result. The current year’s total aluminum deliveries have risen to 1.08 million tons, which is 8.2% more than the eight-month volume for 2013.

Inventories of aluminum products at U.S. service centers reportedly rose 3.8% from July to August, to 404,200 tons, which is 10.8 more than the operations had in stock during August 2013. At their current delivery rate, the U.S. service centers have 3.0 months of aluminum material in stock.

Canadian service centers shipped 12,900 tons of aluminum during August, 6.5% less than during July, and 2.0% more than during August 2013. Their year-to-date total for aluminum shipments is 107,500 tons, 2.4% more than during the first eight months of last year.

Aluminum inventories at Canada’s centers are now reported to be 41,200 tons, rising 6.7% from July and 15.0% from August 2013 levels.

At their current rate of deliveries, MSCI estimated that Canadian service centers have a 3.2-month supply of aluminum products.

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