Aluminum stocks clog distributor warehouses

By Staff -- Purchasing, 2/8/2001

Slippage in end-user demand is starting to show in business condition reports from the National Association of Aluminum Distributors (NAAD). The Philadelphia-based trade group says service center shipments of aluminum mill products through October 2000 were 7% higher than through the first 10 months of 1999. But inventories were 24% higher.

"Aluminum service centers' shipment's peaks and valleys are starting to show signs of leveling out," says Andrew T. Ryder, executive vice president of NAAD . "Managing inventories now is a high-interest item with many NAAD members." New-order cutbacks by service centers are apparent in reducing bookings being reported over the past several months by the mills. Still, the distribution industry entered November with 3.5 months' worth of stock on hand.

Distributors have told PURCHASING Magazine that November and December showed a continuation of business deceleration from a slowing metalworking economy. Most distributors expect to be overstocked well into the first quarter.