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Rail News: Rail Industry Trends

RTA report: Tie production up, purchases down in October

Two surprises occurred in the crosstie market in October, according to the Railway Tie Association’s (RTA) monthly report. Purchases, which usually increase in October, plummeted 18 percent from September’s level to 1.3 million units and production, which typically increases about 5 percent, jumped 17 percent from September’s total to 2 million units.

Meanwhile, inventories rose 5 percent (or by 737,000 ties) to 15.5 million units compared with September’s level and the inventory-to-sales ratio increased from 0.70 to 0.74.

During 2008’s first 10 months, tie purchases increased 3 percent to 17.9 million units while production dropped 5 percent to 16.6 million units vs. totals from the same 2007 period.

“Thus, inventories have dwindled most of the year until the last two months,” RTA officials said in the report.

Twelve-month rolling data shows tie purchases inched up 1 percent to 20.8 million units and production decreased 5.8 percent to 19.6 million units.

“Production appears to have reached a plateau after a slide from highs during mid-2006,” the report states. “Inventories have been drawn down by 1.25 million ties, or 5 percent. The inventory-to-sales ratio at 0.74, though, is still well below the most recent five-year average of 0.81.”

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More News from 11/26/2008