CHICAGO Aluminum product shipments from U.S. and Canadian service centers increased in March compared with a month earlier while inventories edged lower.
While market participants generally agreed that March numbers were disappointing, especially compared with the same month last year, their outlook on the coming months differed. Some argued that a seasonal uptick in activity was beginning to emerge, while others said the usual spring rebound had thus far failed to materialize.
U.S. and Canadian service center aluminum shipments totaled 129,800 tons in March, up 2.9 percent from 126,200 tons the previous month but down 13.4 percent from 149,800 tons a year earlier, according to Metal Service Center Institute (MSCI) data.
"We were concerned about business last month but have seen a rather good uptick in April," one service center source said. "I would call it a definite reversal in trends."
April results should be strong, mostly because of normal seasonality, with warmer weather bringing increased demand from the building and construction sector in particular, he said.
Construction activity across large swathes of the United States might have been hindered in March by cold weather and snow, the service center source speculated. "Last year we had a very strong February and March but had given it all back by June," he said.
The service center source said his companys March results were hurt by a combination of weather and political uncertainty in the United States, chiefly stemming from budget and health-care policies. For smaller companies, those headwinds wont be helped by better weather, he said.
Still, he said he was encouraged by positive economic indicators, such as continued improvement in the Architectural Billings Index (ABI), an advance indicator of construction activity.
But a distributor source questioned whether optimism about an April rebound might be misplaced. "Ive not heard anything good from my customers, and we had a pretty good Marchso I would be surprised if April is better," he said.
Customers, especially service centers, dont want to put inventory on the floor in an environment of lower prices, the distributor source said. "People are lowering their prices to get business and holding off buying to see whether prices fall even further," he said, adding that business is somewhat better among end-users.
U.S. service center shipments of 116,900 tons in March were up 2.3 percent from 114,300 tons the previous month but down 13.7 percent from 135,500 tons in March 2012. Inventories totaled 362,400 tons at the end of March, down 0.2 percent from 363,100 tons a month earlier and 3.1 percent from 374,100 tons in March 2012.
Canadian distributors shipped 12,900 tons of aluminum in March, up 8.4 percent from 11,900 tons in February but off 9.8 percent from 14,300 tons a year earlier. Canadian inventories totaled 37,800 tons at the end of March, down 1 percent from 38,200 tons in February but up 7.1 percent from 35,300 tons in March 2012, the MSCI data show.