North American purchasing of aluminum mill products was 10.9 billion lb in 2003, a 3.5% decline from revised consumption of 10.3 billion lb in 2002, and the lowest annual consumption since 1993, according to calculations by Purchasing from industry and government data. The outlook for 2004 is uncertain: "Aluminum orders and shipments remain in an uneasy uptrend," says analyst Lloyd O'Carroll at BB&T Capital Markets. "We would expect the uptrend to gain momentum, but that's based on anecdotal evidence and not hard data." John Mothersole at Global Insight also hears "that anecdotal reports increasingly show an uptick in activity, which we expect will shortly appear in the data." Mothersole suggests that "inventory restocking will boost apparent consumption over the next three to four quarters as material begins to move back into supply chains." But, he also isn't sure actual physical consumption in North America will rise any more than 3.5% in 2004. Here's why: Production of transportation equipment, aluminum's biggest growth market, is projected to increase only modestly (4% or so) because of flat-to-down automotive and light truck assembly. Aluminum's second biggest regional market, packaging, will see unspectacular growth in 2004. However, construction, the third big market for aluminum, faces uncertain prospects this year.

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