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STEEL SERVICE CENTERS REPORT STRONG FIRST QUARTER SHIPPING PERFORMANCE

 CLEVELAND, April 22 /PRNewswire/ -- Average daily shipping rates for the nation's $24 billion steel service center industry declined slightly in March. However, first quarter shipments were up more than 9 percent from fourth quarter 1992, according to the latest Business Conditions Report of the Steel Service Center Institute (SSCI).
 March's average daily shipping rate was down 0.5 percent from February, although five of seven product categories registered small-to- moderate increases. Carbon plate was the largest gainer, up 4.2 percent over February, followed by structurals, up 1.1 percent. Stainless steel products, carbon bars and alloys all registered gains of less than 1.0 percent. These advances, however, were countered by decreases in carbon tubing and flat rolled, down 7.5 percent and 1.4 percent, respectively.
 "March's average daily shipping rate masked what was actually a strong shipping month," said Andrew G. Sharkey, SSCI president. "March, which had three more shipping days than in February and was the longest shipping month in the past year, would have been even stronger if not for weather related disruptions caused by the blizzard in the East and Southeast sections of the country."
 In spite of March's performance, the average daily shipping rate for the first quarter, ended March 31, was up 9.5 percent compared to fourth quarter 1992. Carbon flat rolled (up 13.6 percent), alloy products (up 10.6 percent) and stainless steel (up 10.2 percent) led the gainers. The only decline was in structural products, down 5.0 percent from the previous quarter.
 "January started off the year with an abnormal 16.5 percent increase over December. February and March have drifted back, settling shipments into a more normal range. The result is a strong showing for first quarter 1993," said Sharkey.
 Year-to-date comparisons (three months) show that first quarter average daily shipping levels rose 8.9 percent over first quarter 1992. Similarly, March's average daily shipping rate registered a 5.9 percent increase compared to the same month last year.
 Optimism on the part of SSCI members is less bullish than in previous months, but remains higher than a year ago. For example, 65 percent of those service center executives polled said they expect incoming orders to increase during the next quarter -- compared to 74 percent in March 1993, and 50 percent in April 1992. This tracks closely to the 53 percent responding similarly from the Steel Committee of the National Association of Purchasing Managers (NAPM).
 "The bloom may be off the rose, but optimism remains strong and realistic as we move into the second quarter," said Sharkey.
 In March, total inventories were at 5,781,950 tons, compared to 5,899,083 tons in February, a reduction of more than 120,000 tons. March's inventory-to-shipments ratio also declined, dropping to 2.74 months of supply -- its lowest level on record. One year ago, the inventory-to-shipments ratio was 3.18 months of supply.
 "Inventories for the entire first quarter were down across the board, with the exception of stainless, which had a slight increase. In our opinion, there appear to be three variables keeping inventories at such low levels. First, producing mills are having difficulty keeping pace with orders, especially in carbon flat rolled products. Second, with price increases moving through the system, some steel service centers do not have sufficient bank credit available to support larger inventories at higher prices. Lastly, service centers are really listening to their customers who are saying that business is good, but not great," explained Sharkey.
 Citing the February report from the U.S. Department of Commerce, Sharkey noted that new orders for manufactured goods increased $3.6 billion, up 1.4 percent to a new high of $258.6 billion. New orders for consumer goods also continue to increase, including automobiles, appliances and farm equipment, while construction continues to lag.
 "Improved earnings and the lower cost of borrowing money bodes well for many large manufacturing companies," said Sharkey. "However, most small and medium-sized companies continue to experience difficulties in accessing capital for production and business expansion."
 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.
 March Average Daily Shipping Rate -- All Products
 Down 0.5 percent compared to February, 1993
 Up 5.9 percent compared to March, 1992.
 Up 8.9 percent year-to-date (3 months).
 First Quarter Average Daily Shipping Rate -- All Products
 Up 9.5 percent compared to fourth quarter, 1992.
 Up 8.9 percent compared to first quarter, 1992.
 Inventories
 March, 1993: 2.74 months' supply.
 February, 1993: 3.20 months' supply.
 March, 1992: 3.18 months' supply.
 -0- 4/22/93
 /CONTACT: Mark Willis of Watt, Roop & Co., 216-566-7019, for Steel Service Center Institute/


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

AR -- CL002 -- 9159 04/22/93 08:07 EDT
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Date:Apr 22, 1993
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