Coming off a peak sales year in 2000, metals service centers saw sales slide more than 10% to 32 million tons in 2001, which is the lowest annual tonnage sourced from distributors since 1996. There is widespread optimism about stronger metals consumption in North America this year. But most service center executives say they did not notice any sharp physical demand increases in the first quarter. What's more, they are suggesting a second-half pickup will be slow. For example, Tom McKane, president of specialty metals distributor A. M. Castle & Co. in suburban Chicago, says: "There are early signs that the inventory liquidation phase among manufacturing companies is concluding and a slow gradual recovery of metals demand will take place in the months ahead." However, with economists suggesting that industrial production for the year will be even with or slightly lower than last year, most distribution industry insiders won't even guess about the level of buying through service centers this year. PURCHASING's forecast is that buyers will increase their distribution purchases of aluminum, steel, copper, brass, bronze and superalloys by a modest 5% to 33.7 million tons.

stundza@cahners.com