CHICAGO Service center
sources are divided over whether recent data that showed
declines in U.S. aluminum shipments and inventories last month
indicate tough times ahead.
Some market sources argued that
they had yet to see optimistic talk translate into increased
orders as customers continue hand-to-mouth buying patterns,
while others said they have seen a significant uptick in both
orders and inquiries for the May-June timeframe and expect a
strong finish to the year and an even stronger 2014.
One service center source said
his company had seen orders for most products dip in 2013
compared with last year. In plate, for example, the trend has
hit shipments to the aerospace, defense and general fabrication
industries on a combination of economic uncertainty, a supply
glut, reduced government spending, customer wariness to restock
amid falling prices, and a general lack of business activity,
Of aluminum products tracked by
the Metals Service Center Institute (MSCI) in the United States
amm.com, May 15), only rod and bar showed an
improvement in April compared with the same month last
"Customers are still very
cautious and buying only what they need," the service center
source said. "There is less business to be had, and people are
aggressively pursuing it, so pricing is under extreme pressure.
... There is no one person to blame. Were all to
A second service center source
said Aprils shipment numbers dont give him much
optimism for the rest of 2013. "Ive got a small handful
of customers who say they are as busy as they have ever been.
But theyre the minority," he said.
On the pricing front, "its
a disaster," he said. "Some people need to move metal and are
doing it at crazy prices," he said, speculating that they might
be under pressure to meet either internal company targets or
those set by their lenders. "I wish I had a good explanation.
But I hope it turns around quickly."
But a third service center
source strongly disagreed with downbeat assessments of the
market. "We are seeing a significant amount of activity. And
people are looking to buy metal through 2014 and out five
years," he said. "Like everyone else, we did not anticipate the
year that were having. But its getting better."
He also predicted a "boomer of a
year" in 2014, citing strong demand from customers in the
aerospace sector, some of whom are buying metal now that
wont be "bolted on" to planes or helicopters until the
first or second quarter of next year.
He blamed poor sentiment on
misguided forecasts at the beginning of the year. The entire
supply chain "geared up" to meet demand that is materializing
later than expected, he said. While that material might not be
being used up at the pace or in the months expected, "no one is
walking away from these new planes, chemical plants and