NEW YORK North American aluminum shipments increased to a seasonally adjusted annual rate of 22.9 billion pounds in May, up nearly 5 percent from the previous month, according to data released June 25 by the Aluminum Association.
Major product types continued to show improvement in May, with extrusion and plate orders leading the pack, according to Timothy Hayes, principal of New York-based Lawrence Capital Management Inc.
"Extrusions are showing noticeable strength for the year, though they were flat in May. This suggests recovery in construction markets and strength in key transportation markets," Hayes said in a report. "Of the three extrusions categories, extruded shapes is performing well and pipe and tube is up robustly. Plate orders remain very strong compared with a year ago, despite crashing from stratospheric levels at the turn of the year."
Hayes estimated that inventories "decreased to 51 days (supply in May) from 53 days in April," which is slightly below the average over the past few years.
Aluminum sheet, excluding material used to make cans, also continued to see increased demand in May. "(Its) encouraging because they have seemingly lagged overall industry activity," Hayes said, adding that aluminum sheet is the biggest category in terms of tonnage.
May shipment figures released by the Aluminum Association June 6 showed that the industry had largely recovered from this years harsh winter, which brought historically cold temperatures and record snowfalls across much of the country, Hayes said.
"May showed that shipments were finally showing more vigor following a harsh winter and lackluster activity in April," Hayes said. "Still, shipments are barely up year to date. Fortunately, orders were up moderately in May, indicating that shipments should move higher in June."
While Mays numbers were not a huge rebound from previous months, Hayes expects "a pickup to emerge over the next few months, and we remain comfortable with our forecast of a 3-percent increase in shipments in 2014."