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Rail News: Rail Industry Trends

RTA report: Tie purchases rebound, production plummets in July


After plummeting in June, crosstie purchases bounced back in July — way back. Last month, purchases totaled 2.1 million units, up 64 percent compared with June, according to the Railway Tie Association’s (RTA) monthly market report.

However, tie suppliers’ inventories had risen 4 percent in June, prompting production cuts in July, RTA said. Production last month totaled 1.6 million units, down 17 percent compared with June.

In addition, the inventory-to-sales ratio took another plunge along its own ’07 roller-coaster ride.

“After soaring to 0.84 in June, the ratio settled down to 0.80 in July,” RTA officials said in the report. “[That’s] a bit above the five-year average of 0.77.”

Through 2007’s first seven months, tie purchases totaled 12.2 million units, down 7.4 percent, and tie production totaled 11.9 million units, down 10.7 percent compared with the same 2006 period. Purchases are exceeding production by about 3 percent, RTA said.

Meanwhile, 12-month rolling totals show purchases totaling 20.4 million units and production, 21 million units.

“Purchases hit a record peak of 22 million ties in February, declined a bit under 20 million by June, but bounced back to 20.4 million in July,” RTA officials said. “This is 1 percent below last year and suggests the market may be stabilizing at a level that is quite high by recent standards.”