Exports Help U.S. Trim Trade Deficit
The U.S. trade deficit declined by $46 billion in 2007, according to the U.S. Commerce Department, marking the greatest year-over-year improvement in 16 years.

The National Association of Manufacturers, Washington, D.C., says manufactured goods made up 60 percent of the improvement and continue to drive the United States’ improved foreign trade performance. The improvement in manufactured goods trade was credited to growth of U.S. exports, which increased at nearly twice the pace of imports in 2007.

“The return of the dollar to its level of the 1990s played a key role,” says Frank Vargo, vice president for international economic affairs for NAM. “U.S. prices are once again competitive in world markets. This is particularly notable in the improvement in our manufactured goods trade with Europe and Canada.”

Vargo also cited better balance with free trade partners such as NAFTA, CAFTA, Chile and Australia, among others. The manufactured goods deficit with those countries accounts for just 3 percent of the overall deficit.

Still, he says, the U.S. has yet to show signs of improving its balance with China.

“Unfortunately, the U.S. manufactured goods deficit with China grew about $30 billion last year and now accounts for over half of our total manufactured goods trade deficit,” Vargo says.

“China must accelerate its currency appreciation. While the 15 percent so far is significant, more change is needed. China also needs to act more quickly on protecting intellectual property, cutting its subsidies and ensuring the quality of its exports.”

MSCI
Service Center Shipments Decline in January
Despite the weak overall economy, January declines in steel and aluminum shipments from U.S. and Canadian service centers were small, suggesting more strength in metals end-use markets than expected, reports the Metals Service Center Institute, Rolling Meadows, Ill.

MSCI’s Metals Activity Report shows January steel shipments were down from year-earlier levels just 2.7 percent in the United States and 2.3 percent in Canada, while Canadian aluminum shipments dropped a modest 1.3 percent. Only the 5.9 percent decline in U.S. aluminum shipments suggested larger economic weakness. Yet that number, following the 13.4 percent year-over-year decline in U.S. aluminum shipments in December, was also relatively small.

Aluminum inventories in both countries rose, and Canadian steel inventories also rose slightly. Steel inventories at U.S. service centers declined by less than 1 percent from December levels.

Steel product activity
Steel shipments from U.S. service centers fell to 4.5 million tons in January. Month-end inventories totaled nearly 12.2 million tons, 25 percent lower than a year ago. At January shipping rates, the number of months of supply on hand was 2.7, well below the December months-of-supply figure because of the onset of typical spring seasonal supply requirements.

Canadian service centers shipped 329,400 tons of steel during January, down 2.3 percent from a year ago. Steel inventories in Canada ended the month at 1.2 million tons, or 3.8 percent below January 2007, but slightly larger than in December. Canadian steel inventories equaled a 3.7-month supply at January shipping rates, also well below December’s figures.

Aluminum product activity
U.S. service centers shipped 98,800 tons of aluminum products in January. Year-over-year inventories were down 24.5 percent, at 277,200 tons, but rose slightly from inventories at the end of December. Aluminum stocks equaled a 2.8-month supply at January shipping rates.

Canadian service centers shipped 10,000 tons of aluminum products during January, down 1.3 percent from a year ago. Inventories, although down 0.9 percent from January 2007, rose to 30,300 tons, a 3.0-month supply at January shipping rates.

IISI
North American Steel Production on the Rise
World crude steel production for the 66 countries reporting to the Brussels-based International Iron and Steel Institute was 113 million metric tons in January, a 4.9 percent increase from January 2007. However, the moving annual total growth rate slowed from a peak in March 2007 of 10.8 percent to 6.6 percent in January 2008.

North America increased production to 11.6 million tons, up 10.5 percent vs. January 2007. North America’s moving annual total growth rate continues to show signs of improvement with four consecutive months of growth. The United States produced 8.4 million tons in January 2008, an increase of 11.4 percent compared to January 2007.

Total production in China was estimated at 40.9 million tons for the month, an increase of 7.3 percent on January 2007. China’s growth rate has slowed from 21.0 percent in January 2007 to 13.3 percent in January 2008. Japanese production was 10.3 million tons, an increase of 1.8 percent, and India produced 4.8 million tons, an increase of 8.8 percent compared to January 2007.

Total crude steel production in the 27 EU countries was 17.9 million tons, 0.4 percent lower than for January 2007. Germany produced 4.1 million tons of crude steel, a reduction of 4.9 percent compared to the same month last year. Production in Turkey was 2.2 million tons, an increase of 8.6 percent compared to the previous year.

AISI
January Imports Below 2006 Rates

Based on preliminary Census Bureau data, the American Iron and Steel Institute, Washington, D.C., reports that the U.S. imported a total of 2.7 million net tons of steel in January, down 4 percent from the same period in 2007. The U.S. also imported 2.2 million tons of finished steel, down 1 percent from 2007. January imports were up 33 percent and 37 percent, respectively, against December, which had fewer shipping days.

Among the products showing large increases in January vs. the month before were structural shapes heavy, up 152 percent; rebar, up 132 percent; oil country goods, up 109 percent; hot-dipped sheets and strip, up 57 percent; cold-rolled sheets, up 31 percent;  hot-rolled bars, up 27 percent; and hot-rolled sheets, up 24 percent. 

In December, U.S. steel mills shipped 8.5 million net tons, an 11.6 percent increase from the 7.6 million net tons shipped in December 2006 and a 2.2 percent decrease from the 8.7 million net tons shipped in the previous month, November 2007.

A year-to-year comparison of year-to-date shipments shows the following changes within major market classifications: service centers and distributors, down 8.6 percent; automotive, up 0.3 percent; construction and contractors’ products, down 1.3 percent; and oil and gas, down 9.9 percent.

CBSA
Copper Shipments off Slightly in January
Service center shipments of copper and copper alloy products during the month of January trailed those reported during the companion month of 2007, but by just 2.0 percent. The average daily shipping rate, year-to-year, was also down 2.0 percent.

For the largest copper volume categories, copper sheet was down 10.6 percent from the prior year, while copper rod and bar was up 15.5 percent.  For the largest copper alloy volume categories, 200 series brass sheet was down 4.4 percent and 300 series rod and bar was down 7.1 percent, but “other rod and bar” was up 24.4 percent.

As is historically the case, January shipments were well above those recorded during the final month of last year, up nearly 40 percent. The average daily shipping rate January vs. December was up 20.3 percent.

CBSA officials continue to receive “mixed signals” from members about their levels of business activity for the first two months of the year. Executives from mills and service centers offer contrasting views on activity thus far in 2008.

SSINA
Stainless Imports Down 7.6 percent in 2007
Stainless steel imports fell 7.6 percent to 765,431 tons in 2007, according to the Specialty Steel Industry of North America, Washington, D.C., though their percentage of demand increased slightly during the year.

U.S. stainless consumption totaled 2.2 million tons, a 14 percent decline from 2007. Import penetration for the year was 34.4 percent, a 2.4 percent increase from 2006.

Year-end data for individual product categories is as follows:

• Stainless steel sheet/strip: Imports were 421,510 tons, an 18.2 percent decrease; U.S. consumption was 1,521,146 tons, a 17.5 percent decrease.
• Stainless steel plate: Imports were 144,638 tons, a 28.6 percent increase; U.S. consumption was 334,499 tons, a 6.7 percent decrease.
• Stainless steel bar: Imports were 122,734 tons, a 1.9 percent increase; U.S. consumption was 227,392 tons, a 2.5 percent decrease.
• Stainless steel rod: Imports were 30,567 tons, a 2.9 percent decrease; U.S. consumption was 63,862 tons, a 10.5 percent decrease.
• Stainless steel wire: Imports were 45,982 tons, a 5.5 percent decrease; U.S. consumption was 78,890 tons, a 5.9 percent decrease.
• Alloy tool steel: Imports were 103,950 tons, a 2.9 percent increase; U.S. consumption was not calculable.
• Electrical steel: Imports were 110,612 tons, a 35.2 percent increase; U.S. consumption was 429,651 tons, a 2.2 percent decrease.

Briefs
While the overall economy grew for the 76th consecutive month, economic activity in the manufacturing sector declined in February, say the nation’s supply executives in the latest Manufacturing ISM Report on Business from the Institute for Supply Management, Tempe, Ariz. “The manufacturing sector failed to grow during the month as the PMI fell below 50 percent (to 48.3), which indicates weaker performance in February compared to January. Manufacturers’ order backlogs continue to erode as the New Orders Index remained below 50 percent for the third consecutive month. With the Inventories and Customer Inventories indexes indicating that manufacturing inventories are at reasonable levels, the major concern is rising prices and falling volume,” says Norbert J. Ore, chairman of the ISM Manufacturing Business Survey committee. Seven industries showed growth in February, while seven others contracted. Among the industries reporting growth in February were miscellaneous manufacturing and primary metals.

Metalforming companies say shipping levels are rebounding modestly from low levels in January, according to the February Business Conditions Report from the Precision Manufacturing Association, Cleveland. In February, 29 percent of participants reported that current average daily shipping rates are above levels of three months ago, up from only 13 percent in January. Just 25 percent reported shipping levels are below levels of three months ago, compared to 43 percent in January. Fifty-four percent of participants forecast that general economic activity will remain the same over the next three months, while 32 percent predict a decline in business conditions.

The National Association of Manufacturers, Washington, D.C., has filed suit in federal court challenging a major provision of lobbying legislation enacted last year, asserting that the “vague, overbroad and burdensome” provision compromises First Amendment rights. The case, National Association of Manufacturers v. Taylor, was filed in the U.S. District Court for the District of Columbia. “This pernicious law should be seen as a potentially lethal threat to trade associations,” says NAM President John Engler. “It would require associations like the NAM to release the names of many members who contribute more than $5,000 for lobbying activities, violating their right to privacy.”

The Metals Service Center Institute’s regional chapters awarded 117 college scholarships in 2007, more than double the number awarded in 2006. When combined with matching sums provided by the MSCI national organization, the awards totaled more than $198,000.

The Steel Framing Alliance has released the first TechSpec on “Cold-Formed Steel Framing,” a document the Washington, D.C.-based market development group says is an excellent resource for any builder considering making the switch to cold-formed steel. The four-page document provides a comprehensive overview of steel framing, including what it takes to make the switch, what to consider when determining if cold-formed steel is right for the next project, and steps to take when a builder decides to start building with steel.