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Metals buyers are getting busy again

Staff -- Purchasing, 4/4/2002

The metalworking recession appears to be over. Metals buyers report incoming orders at their companies growing in March for the first time since October 2000. Seventy-one percent of buyers report business as the same as or better than the previous month. This reflects the new-order wave that showed manufacturing factories of all kinds boosting production in February for the first time since July 2000. Another indicator: PURCHASING's monthly survey shows the buying-plans index for all metals the strongest since September 2000. Seventy-eight percent of buyers will maintain or boost purchases in the next three months. This activity matches reports from various metals trade associations, which show improved bookings in the first quarter. However, the level of quarterly new-order bookings, when compared with previous years, is the weakest since the mid-1990s. That matches the latest poll of metals buyers, which shows continued as-needed buying. The inventory-building index is stuck below 50, which signifies no expansion ahead. Still, since destocking of metals has been so intense for the past year and a half, some market analysts forecast heavy restocking ahead.

 

Hot Spots

With orders for flat-rolled aluminum rising, mills are increasing prices on common alloy sheet prices. Tags have been stuck at around 90¢/lb lately and the hike is 5¢. The market is in disarray, though, since not all the mills have lined up behind this increase and some have proposed only a 3¢ escalation.

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