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9/16/2008



Rail News: Rail Industry Trends

Tie production up, purchases down in July, RTA says


In July, crosstie buyers snapped up the number of ties produced, reducing the tie inventory only minimally, according to the Railway Tie Association's (RTA) monthly crosstie market report. The inventory dropped from 14.72 million units in June to 14.68 million units in July.

Tie purchases in July totaled 2 million units, down 14 percent compared with June's level — the first month-over-month drop since April, RTA said. Production totaled 1.9 million units, up 11 percent vs. June's count.

During 2008's first seven months, tie purchases reached 14.6 million units and production totaled 14.6 million units, up 25 percent and 3 percent, respectively, compared with totals from the same 2007 period. Purchases have exceeded production since February, RTA said.

According to 12-month rolling data, purchases stood at 22.7 million units and production, at 21 million units. The inventory-to-sales ratio dropped to 0.65 — the lowest level since September 1998.

"Perhaps the most significant recent development is the reduction in inventories, having reached their lowest level since August 2005," the RTA report states. "Ties are down 10 percent, or by 1.6 million [units], during that period."


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