decline in aluminum shipments has dented North American service
centers confidence for the second half of the year
despite bullish predictions about the markets long-term
"Its not a
crisis time in the industry. But there is very little tangible
information that you can point to that would allow you to feel
good in the short term," one service center source said. "I
think weve hit the bottom of the market. The question now
is when are we going to bounce back?"
Shipments fell in both
the United States and Canada during August, according to the
latest Metals Service Center Institute (MSCI) data. That
followed gains in July that had some market players predicting
a strong finish to 2013 (
amm.com, Aug. 15).
centers aluminum product shipments totaled 133,100 tons
for the month, down 0.8 percent from 134,100 tons a year
earlier, and inventories fell 4.1 percent to 365,000 tons (2.7
months supply) from 380,700 tons (2.8 months
supply) in the same comparison. Shipments of just over 1
million tons through August were 4.6 percent below the nearly
1.05 million tons shipped in the first eight months of last
centers shipped 12,700 tons of aluminum products in August,
down 5.1 percent from some 13,400 tons a year earlier, while
inventories tumbled 8.6 percent to 35,800 tons (2.8
months supply) from 39,200 tons (2.9 months
supply). Shipments for the first eight months of the year
totaled 105,000 tons, down 3.9 percent from 109,200 tons in the
same period last year.
Positives for the
aluminum industry, in theory, include improving construction
data and widely expected future strength in the automotive
sector, according to market sources.
Demand for aluminum
auto body sheet, a potential "game changer" for the aluminum
industry, was estimated at around 200 million pounds in 2012,
but could surge to some 1 billion pounds in 2014 and double to
2 billion pounds by 2020, Davenport & Co. LLC analysts
Lloyd T. OCarroll and John F. Ockerman said in a research
note Sept. 16.
"We see this as the
most important, transformative trend for the aluminum industry
on a medium- and long-term basis since the introduction of the
aluminum can," they wrote.
The service center
source didnt disagree with the assessment, but questioned
when the predictions might translate into more orders. "Those
kinds of positives are clearly keeping the market going. But
theyre not enough to give it any real buoyancy," he