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5/22/2007



Rail News: Rail Industry Trends

Tie purchases soar, production plummets in April, RTA says



After a slow March, crosstie purchases rebounded bigtime in April — so much so, orders through 2007’s first four months equaled purchases during the same 2006 period, according to the Railway Tie Association’s (RTA) monthly crossite market report. April purchases totaled 1.9 million units, up 58 percent compared with March.

However, tie production — which soared in March while purchases tumbled — decreased 8 percent to 1.6 million units in April. In addition, the tie inventory fell slightly from 16.5 million units in March to 16.3 million units in April, and the inventory-to-sales ratio dropped a tad from 0.77 to 0.76.

“The inventory-to-sales ratio has displayed a downward trend since 2003, and now at 0.76 is well below the latest five-year average of 0.79,” according to the report. “The data suggests a greater degree of inventory control in recent years.”

During 2007’s first four months, tie purchases totaled 6.8 million units and production totaled 6.4 million units, or roughly where the figures stood at the end of April 2006, RTA said.

Meanwhile, 12-month rolling totals show purchases holding at 21.3 million units and production decreasing slightly to 21.6 million units compared with figures at March’s end. On a year-over-year basis, purchases are up more than 11 percent and production has increased 2.3 percent, RTA said.


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