Service centers may set another supply record
By Tom Stundza -- Purchasing, 10/7/1999
Most service-center managers interviewed late last year predicted that demand for aluminum from distributors would be flat to declining in 1999. Maybe they were overly cautious. Distribution shipments through July are even with 1998; however, new industry forecasts suggest service centers will supply buyers with 2.4 billion lb of the light metal, a new record, and will maintain that level for the next year or two."Our members have remained cautious about 1999 industry performance, and many continue to project a flat year overall," says Julie S. Thane, executive VP of the National Association of Aluminum Distributors (NAAD). "However, it now appears that service centers are on course to exceed their 1998 record shipments." She notes that such "booming end-use segments as the truck-trailer market, construction, and high-tech fabrication" have boosted this year's service-center business.
Note that buyers are relying more and more on service centers for mill product supplies. Proof: The mid-summer index of monthly shipment activity by members of NAAD was 41.5% stronger than it was at the start of 1996. And, now, Kaiser Aluminum & Chemical's midyear distribution industry outlook prepared for NAAD says: "Mill consolidation could result in a more limited mill sales force, which will drive some mills to rely more heavily on distributors to move products in the marketplace." At the same time, the Kaiser Aluminum market analysis reckons that "distribution business also will continue to consolidate," leaving buyers with fewer choices of aluminum service-center sources
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