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 CLEVELAND, Nov. 22 /PRNewswire/ -- The $24 billion U.S. steel service center industry reported that shipping levels and volume in October remained strong and are expected to continue at established levels throughout the fourth quarter. Month-to-month performance continues to fuel optimism and expectation that the industry will approach the record shipping levels attained in 1990.
 According to the latest Business Conditions Report of the Steel Service Center Institute (SSCI), October's average daily shipping rate was off 1.5 percent from September -- a surprisingly strong month which saw a 4.0 percent rise in average daily shipments and increases in all seven product categories. In October, a 0.7 percent increase in alloy products was tempered by moderate decreases in six other product categories, compared to last month. Compared to September's average daily shipping levels, carbon tubing was off 5.2 percent, followed by carbon structurals and plate products, down 3.5 percent and 2.0 percent, respectively. Smaller decreases were registered by carbon bars (down 1.2 percent), stainless steel (off 0.9 percent) and carbon flat rolled (minus 0.5 percent).
 For the third consecutive month, and for the sixth time in 1993, the industry shipped more than 2 million tons. October had 21 shipping days -- the same as in September.
 "Despite a small decrease in the average daily shipping rate, October was a solid month coming on the heels of a stronger than usual September," said David R. Roland, SSCI president. "Although it appears this trend will continue through November and December, a fiercely competitive market has most of our members struggling in their efforts to realize positive margins."
 Compared to October 1992, this month's average daily shipping rate for all products was up 11.8 percent, with all but one product category posting gains. Carbon tubing and flat rolled recorded the most significant increases of 19.8 percent and 19.0 percent, respectively, followed closely by a 17.2 percent increase in alloy products. Structural steel recorded the only year-to-year decrease of 5.1 percent.
 For the year-to-date (10 months), the service center average daily shipping rate continues to outpace last year's performance by 10.2 percent.
 A monthly opinion survey of service center executives taken earlier this month reveals a sustained level of optimism regarding general economic activity and incoming orders through the fourth quarter and into February 1994. Respondents to a survey by the Steel Committee of the National Association of Purchasing Managers (NAPM) reveal an equally high degree of optimism for the next three months.
 "Service centers are gaining momentum and are encouraged by the prospects for a strong fourth quarter. Most will carry this optimism and energy forward into 1994, when we look for the economy to continue to expand," said Roland. Citing the October report from the U.S. Department of Commerce, Roland noted that new orders for industrial machinery and equipment continued to rise, up another 2.5 percent to $24.7 billion. He also noted that September shipments of durable goods increased $2.5 billion, or 1.9 percent to $137 billion -- the highest level on record.
 For the second consecutive month, total inventories declined -- dropping 64,426 tons in October -- and now stand at 6,009,947 tons. This month-to-month decline follows a five-month inventory build that began in April. Inventories remain lean at 2.99 months' supply. September's inventory-to-shipments ratio was 2.97 months of supply, while one year ago it stood at 3.05 months' supply.
 Making an upward adjustment to the Institute's earlier projection of a 6 percent increase in average daily shipments on the year, Roland predicted that a sustained fourth quarter -- void of weather-related delays and/or trucking slow-downs or protests against higher fuel costs -- could result in a 9 percent increase in average daily shipments for 1993, compared to 1992. "A 9 percent increase would push total service center shipments up toward 23.5 million tons for the year -- close to the 1990 record shipping level of 23.9 million tons.
 "Through the first ten months of 1993, shipments of most products are well above 1992 levels," reported Roland. "Structurals continue to lag due to a weak construction market nationwide. Construction activity, however, has begun a slight movement upward, and we should see some improvement in 1994 as commercial and residential construction rebound."
 Focusing on 1994, Roland said the Institute is forecasting a 2 percent increase in shipping levels, with moderate gains to already strong shipments in carbon flat rolled, plate, bars, tubing, stainless steel and alloy products. A 2 percent increase would place 1994's total shipments at or near 23.9 million tons.
 Roland said that ending inventories for 1993 should remain near 6.2 million tons, or about 3.0 months of inventory supply. "Service centers will continue their efforts to turn inventory more rapidly, rather than stock more. This is one way they hope to improve profitability since margins will continue to be squeezed."
 Roland predicted a 2 to 3 percent increase in steel consumption in 1994, with construction joining automotive, appliance, machinery and equipment, and oil and gas markets in the upturn.
 U.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 U.S. 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 industry, its Business Conditions Report is considered an excellent barometer for the state of the economy.
 The Steel Service Center Institute is a trade association representing the interests of the North American steel service center industry.
 October Average Daily Shipping Rate -- All Products
 Down 1.5 percent compared to September, 1993.
 Up 11.8 percent compared to October, 1992.
 Up 10.2 percent year-to-date (10 months).
 October, 1993: 2.99 months' supply
 September, 1993: 2.97 months' supply
 October, 1992: 3.05 months' supply
 -0- 11/22/93
 /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:

DA -- CL001 -- 6660 11/22/93 08:03 EST
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Publication:PR Newswire
Date:Nov 22, 1993

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