LONDON Aluminum shipments by U.S. service centers fell nearly 13 percent in November from the prior month, and sources say they expect the trend to continue through year-end as December volumes continue to slide.
U.S. service centers shipped 109,100 tons of aluminum products in November, down from 125,000 tons in October and a nearly 10-percent drop from 120,800 tons shipped in November 2011, according to Metals Service Center Institute (MSCI) data.
On a tons-per-day basis, aluminum shipments fell 3.7 percent to 5,200 tons per day in November from 5,400 tons in October and dropped 13.3 percent year on year.
As a result of declining shipments, distributors inventories rose, with service centers holding 3.3 months supply of aluminum on their floors last month, up from 3 months worth in October and on par with stocks held at the same point last year.
Canadian service centers also saw a decline in activity, shipping 13,100 tons in November from 14,000 tons a month earlier, and held 3 months worth of aluminum on their floors, up from 2.8 months worth in October.
"These numbers suck. Nobody is buying anything (and) inventories are higher," one service center source told AMM. "And were having our worst month in December. We expected it to be a little slower, but were way behind even last December. I think everyone is in a hunker-down mood for year-end."
A second service center source agreed that last month was slower than expected, a trend that has only continued as December takes hold.
"November was a little lower on a daily rate basis (and) lighter overall than October. And activity levels are slow this week. I dont expect the rest of the month to set any records," he added.
Sources agreed that seasonality is one factor behind the slowdown, but the U.S. election might have also dampened shipments last month.
"November was the election, so there may have been more tentative steps taken (by consumers). Its a holiday month as well," the second service center source said.
But while there is industrywide caution as 2012 wraps up, service centers anticipate most end-markets should experience a bump in demand going into the new year.
"The majority of our customers are cautiously optimistic, with some sporadic political grumblings," a third distributor said, adding that he is getting several orders for January delivery now, primarily from consumers in the home construction, aerospace and marine end markets.
"I think after the fiscal cliff and all of that nonsense, by the end of January and February everyone will see that the world is still here and the world is still using metal," the first distributor source said.
"Of course everyone is still waiting for this political action. I think were getting pretty close," the second service center added.