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MAY SHIPPING RATES INCREASE FOR STEEL SERVICE CENTERS

 CLEVELAND, June 22 /PRNewswire/ -- The nation's $24 billion steel service center industry reported a moderate increase in May's average daily shipping rate, continuing an upward trend that began in January. However, with only 20 shipping days in May (two fewer than in April), total tons shipped declined for the second consecutive month.
 According to the latest Business Conditions Report of the Steel Service Center Institute (SSCI), five of seven product categories remained steady or posted gains in May, as the average daily shipping rate for all products increased 3.7 percent from April.
 Stainless steel products experienced the most significant increase of 6.8 percent over April, while equally strong gains were prevalent among carbon flat rolled (up 6.4 percent), carbon bars (up 5.3 percent) and alloy products (up 4.8 percent). Structural steel products and carbon tubing recorded slight drops in shipping rates, down 1.4 percent and 2.4 percent, respectively. Carbon plate remained unchanged from April.
 On a year-to-year comparative basis, May average daily shipments rose 10.6 percent from May 1992. Stainless steel and carbon flat rolled were up 13.4 percent and 13.1 percent, respectively, from the May reporting period last year. Alloys, carbon plate and carbon bars also experienced solid double-digit gains. The only decline was in carbon structurals, off a slight 0.7 percent from the previous year.
 For the year-to-date (five months), the service center average daily shipping rate for all products is running 9.7 percent ahead of last year's pace.
 "Average daily shipments for May were strong, second only to the 16.5 percent jump recorded in January," said Andrew G. Sharkey, SSCI president. "Most product categories continue to show improvement, with the exception of structurals which are struggling due to ongoing difficulties in the construction markets." Sharkey also stated that the total industry average daily shipping rate -- currently at 95,626 tons per day -- is at its highest level in over two years.
 According to a monthly survey of service center executives taken in early June, optimism has dropped significantly in the past three months. For example, only 15 percent of those service center executives polled said they expect incoming orders to increase during the next three months, which tracks closely with the 25 percent responding similarly from the Steel Committee of the National Association of Purchasing Managers (NAPM).
 "Confidence levels among steel service centers have fallen and remain relatively flat, due mainly to anticipation of seasonal slowdowns typical of the summer months. However, a slight weakening of the economy and eroding confidence for the new administration may be significant factors," said Sharkey.
 May's ending inventory experienced a modest increase, rising 196,000 tons to stand at 6,038,333 tons, compared to 5,842,173 tons in April. A year-long inventory reduction has kept levels below the six million ton mark since March 1992.
 "Inventories have finally started to increase, as predicted in the first quarter," said Sharkey. "Carbon flat rolled and carbon bars have shown the most significant build-ups. Carbon tubing recorded the only inventory reduction in May."
 Although inventories now stand at more than six million tons for the first time in over a year, they continue to be under control at 3.15 months' supply. One year ago, the inventory-to-shipments ratio stood at 3.40 months of supply.
 Citing the April report from the U.S. Department of Commerce, Sharkey noted that new orders for manufactured durable goods increased less than 1 percent, following a combined decrease of 6 percent in March and February. At the end of April, however, new orders for 1993 are 10 percent above the same period in 1992.
 The Steel Service Center Institute is a trade association representing the interests of the steel service center industry. America's steel service centers purchase and distribute about 30 percent of all carbon industrial steel products and nearly 45 percent of all stainless steel produced in the United States.
 Steel service centers are the largest-single customer group of the domestic steel industry and serve the metal supply needs of more than 300,000 manufacturers and fabricators through plant locations nationwide. Because SSCI reports the scope and level of business activity as it relates to a wide cross section of industrial America, its Business Conditions Report is considered an excellent barometer for the state of the economy.
 May Total Average Daily Shipping Rate
 Up 3.7 percent compared to April 1993.
 Up 10.6 percent compared to May 1992.
 Up 9.7 percent year-to-date (5 months).
 May Total Ending Inventory
 May, 1993: 3.15 month's supply.
 April, 1993: 2.87 month's supply.
 May, 1992: 3.40 month's supply.
 -0- 6/22/93
 /CONTACT: Mark Willis of Watt, Roop & Co., 216-566-7019, for the Steel Service Center Institute/


CO: Steel Service Center Institute ST: Ohio IN: MNG SU:

KL -- CL001 -- 4357 06/22/93 08:02 EDT
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Date:Jun 22, 1993
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