Steel, Aluminum Shipments Decline Sharply
Steel shipments by service centers in the United States and Canada declined at double-digit rates in August, and aluminum shipments fell sharply as well, as economic uncertainty reduced orders to the minimum amounts required. Inventory-to-shipment ratios rose to higher levels for steel in both countries and in aluminum in the United States, reports the Metals Service Center Institute, Rolling Meadows, Ill., in its latest Metals Activity Report.
Steel product activity
Shipments of steel products by U.S. service centers declined in August to 3.87 million tons, down 16.8 percent from year-ago volume. Year-to-date shipments totaled 34.2 million tons, down 5.3 percent from the first eight months of 2007. At the end of August, steel inventories totaled 13.1 million tons, 0.5 percent higher than at the end of August 2007 and equal to a 3.4-month supply.
Steel shipments from Canadian service centers fell 18.2 percent from year-earlier levels, to 258,200 tons, while shipments for the year to date, at 2.4 million tons, were down 4.6 percent from a year ago. Inventories of 1.16 million tons were 2.5 percent lower than at the end of August 2007 and equal to a 4.5-month supply.
Aluminum product activity
Shipments of aluminum products from U.S. service centers in August fell 16.1 percent from year-ago levels, to 86,000 tons, and year-to-date shipments of 738,900 tons were down 7.3 percent from the same period in 2007. Aluminum inventories totaled 274,600 tons, down 11.1 percent from the end of August 2007 and equal to a 3.2-month supply.
In Canada, August aluminum shipments fell 8.7 percent, to 9,300 tons, from year-earlier volume. Year-to-date shipments of 80,200 tons were down 1.6 percent from the same period last year. Aluminum inventories totaled 26,400 tons, 6.5 percent lower than a year ago and equal to a 2.8-month supply.
IISI: Crude Steel Production
Up 5.6 Percent in 2008
World crude steel production for the 66 countries reporting to the Brussels-based International Iron and Steel Institute totaled 112.2 million metric tons in August, 2.9 percent higher than the same month last year. World steel production in the first eight months of 2008 totaled 926.3 million tons, a 5.6 percent increase over the same period in 2007.
In August, the world moving annual total growth rate slowed to 5.5 percent from 5.8 percent the previous month.
China produced 351.1 million tons of crude steel in the first eight months of the year, an increase of 8.3 percent. China’s moving annual total growth rate slowed in August to 8.6 percent, compared to its growth rate peak of 26.3 percent in January 2006.
Crude steel production in North America totaled 11.7 million tons in August 2008, an increase of 6.5 percent vs. August 2007. North America’s moving annual total growth rate rose to 6.0 percent from 5.4 percent the previous month. This is its ninth consecutive monthly increase.
AISI: Steel Imports On the Decline
The U.S. imported 2,346,000 net tons of steel in August, down 19 percent vs. July, including 1,958,000 tons of finished steel, down 13 percent, reports the American Iron and Steel Institute, Washington, D.C.
While total and finished steel imports through the first eight months of 2008 were down 11 percent and 12 percent, respectively, the monthly average for finished steel imports in the most recent three-month period (June-August 2008) was up 1 percent vs. the previous three months.
On an annualized basis, total imports of steel in 2008 would be 31.8 million net tons.
One key product showing a large increase in August imports was hot-rolled bar, up 17 percent. For the year-to-date, products with significant increases vs. the same period in 2007 included oil country goods, up 42 percent, line pipe, up 10 percent, and hot-rolled bars, up 9 percent.
ISSF: World Stainless Production Declines in First Half
Preliminary figures released by the Brussels-based International Stainless Steel Forum show that stainless crude steel production decreased in the first half of 2008 by 0.8 percent, compared to the same period of 2007. The decrease was 2.9 percent in the first quarter but just 0.6 percent in the second. All major regions saw lower production volumes in the first half of this year.
In the Asia region, stainless steel production declined by 1.5 percent to 8.3 million tons in the first half of 2008. All stainless steel producing countries reduced their production except China. For individual countries, the rates of decrease ranged from 6 to 13 percent. With an increase of 10 percent, China is the only country in the region to increase stainless steel production, to a total of 3.9 million tons in the first six months of this year.
The second largest producing area, Western Europe/Africa reported a 0.8 percent decrease in stainless steel production during first-half 2008. Total production was 4.9 million tons.
In the Americas, stainless crude steel production declined by 6.4 percent to 1.4 million tons in the first six months.
SSINA: Stainless Imports Up, Consumption Down
Imports of total specialty steel—including stainless, alloy tool steel and electrical steel—totaled 519,792 tons year-to-date through June, a 0.9 percent decrease vs. the same period in 2007. At the same time, U.S. consumption totaled 1,303,997 tons, an 11.5 percent decrease. The result was a market share gain of 4.3 percent for stainless imports, reports the Stainless Steel Industry of North America, Washington, D.C.
“Stainless steel imports of sheet and strip products continue to surge, even in the midst of a 10 percent decline in U.S. consumption” says Doug Kittenbrink, chairman of SSINA. “Currency manipulation and other subsidies are enabling Asian competitors to unfairly target our markets. We strongly believe it is time for the U.S. Congress to address the issue of China currency manipulation.”
The following SSINA data represents U.S. consumption and imports year-to-date through June 2008 compared to the same 2007 six-month period:
- Stainless steel sheet/strip: Imports totaled 258,016 tons, a 13.4 percent increase; U.S. consumption totaled 750,925 tons, a 6.2 percent decrease.
- Stainless steel plate: Imports totaled 50,187 tons, a 36.9 percent decrease; U.S. consumption totaled 133,067 tons, a 33.9 percent decrease.
- Stainless steel bar: Imports totaled 63,224 tons, a 2.7 percent decrease; U.S. consumption totaled 123,372 tons, a 0.4 percent decrease.
- Stainless steel rod: Imports totaled 15,551 tons, a 7.4 percent decrease; U.S. consumption totaled 32,030 tons, an 8.6 percent decrease.
- Stainless steel wire: Imports totaled 22,315 tons, a 5.8 percent decrease; U.S. consumption totaled 38,368 tons, a 7.4 percent decrease.
- Alloy tool steel: Imports totaled 55,461 tons, a 6.1 percent increase; U.S. consumption was not calculable.
- Electrical steel: Imports totaled 55,038 tons, an 8.3 percent decrease;
- U.S. consumption totaled 180,634 tons, a 20.8 percent decrease.
CBSA: August Copper Shipments
Show 16 Percent Decline
August was the most disappointing month of 2008, with shipments down 16.8 percent from the same month a year ago. The average daily shipping rate was off nearly 8.9 percent month-to-month, reports the Copper and Brass Servicenter Association, Wayne Pa.
Two-thirds of the way through the year, total copper and copper alloy shipments were 6.2 percent below the companion 2007 period. The year’s decline was led by alloy shipments, off nearly 9.3 percent.
August alloy shipments were 21.4 percent below those of August 2007. Total copper shipments were off by nearly 10.3 percent.
While August historically rebounds from July’s seasonal slowness, August shipments declined this year by 2.9 percent. For the most part, service centers and their brass mill suppliers are not reporting the September business surge that usually follows the industry’s traditional “summer slump,” say CBSA officials.
Briefs
Precision Metalforming Association President William E. Gaskin expressed concern over the continuing decline in steel imports into the U.S. Imports dipped by 19 percent in August, according to preliminary data released by the U.S. Department of Commerce. Hot-rolled steel imports, the product used most frequently by metalforming companies and automotive suppliers, fell 17 percent on the month. Overall steel imports are down 11 percent this year compared to 2007. “Both steel import levels and domestic production of steel are down significantly, reflecting softer demand for steel amidst an increasingly uncertain business environment,” says Gaskin. “When demand starts to pick up, companies that count on reliable access to steel may well have to contend with limited supplies and serious spot shortages, adding to the challenges that U.S. manufacturers already face.”
According to the September 2008 Precision Metalforming Association Business Conditions Report, metalforming companies expect business conditions to weaken somewhat during the next three months. Conducted monthly, the report is an economic indicator for manufacturing, sampling 164 metalforming companies in the United States and Canada. Metalforming companies also expect a drop in incoming orders during the next three months. Average daily shipping levels remained steady in September. The number of metalforming companies with a portion of their workforce on short time or layoff increased to 26 percent in September, up from 25 percent in August and at its highest level since July 2003. “Increased economic uncertainty in the credit and financial markets is having an impact on PMA members, giving them less confidence that there will be any rebound in orders and shipments in the 4th quarter,” says PMA President William E. Gaskin. “Automotive, housing-related and appliance markets are all projecting lower production levels for the months ahead. While there are pockets of business growth, especially in lower-volume production using fabricating and laser technologies, many longer-run production companies are anticipating a very soft fourth quarter.”
A new trade show named FABTECH Mexico will co-locate with the established AWS Weldmex and METALFORM Mexico shows beginning in 2009. A letter of intent to co-locate the shows was recently signed by the American Welding Society and Weldmex LLC (organizers of AWS Weldmex), as well as the Fabricators and Manufacturers Association and the Society of Manufacturing Engineers (joint organizers of FABTECH Mexico). The first combined exhibition will be held June 2-4, 2009, at the Cintermex exhibition center in Monterrey, Mexico. Location for the annual AWS Weldmex and FABTECH Mexico show will alternate between Monterrey and Mexico City.
To date, legislation and regulations to combat copper theft have been confined to state and municipal jurisdictions. Thus far 28 states and numerous cities have enacted copper and scrap metal theft laws. Now, however, federal legislation has been introduced to combat the thievery of red metals. The Copper Theft Prevention Act would require scrap metal dealers to document copper transactions and would prohibit cash transactions of more then $500 for scrap copper. The newly formed Coalition Against Copper Theft has been set up specifically to promote such federal legislation.
The National Association of Manufacturers is urging federal officials to extend and strengthen the R&D tax credit, which expired at the end of 2007. Forty percent of NAM’s small manufacturer members used the R&D tax credit last year, spurring investment in new-product development and creating thousands of jobs.
Strong demand and tight supplies both in the U.S. and international markets in the April-May time frame slowed import ordering from non-NAFTA sources, reports David Phelps, president of the American Institute for International Steel, McLean, Va. Moreover, international and domestic steel market prices hit their peaks during this time. Imports from NAFTA sources represented the largest declines, with imports from Canada falling by nearly 20 percent and imports from Mexico falling by 27 percent from July to August, reflecting U.S. market conditions more closely than imports from overseas, which arrive with a three- to five-month lag. “Increased arrivals from China reflected the energy market’s insatiable demand for pipe and tube products,” Phelps adds. “Many of those products remain in short supply,” according to the most recent AIIS monthly survey of importers.
