Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Timna Tanners – UBS.
Timna Tanners - UBS
I really wanted to reconcile what David said in the beginning regarding the inventory position 2.5 months on hand. I just was a little surprised because that's higher than what we've seen with MSCI. So, if you could help us understand that.
And along the same lines, I was kind of surprised that you talked about working down inventory further into the fourth quarter and then Greg's comment about how we could see the ball rolling quickly with the supply getting drawn down. So, how do you reconcile working down inventory if you're concerned that there could be a sharp change in market conditions into next year?
David H. Hannah
Timna, I think first off we don't anticipate it that there's going to be a quick uptick in the fourth quarter or maybe even early in the first quarter because typically that doesn't happen. March is kind of the month that is the big catalyst and that's what we have looked towards. But that doesn't mean that we wouldn't see some improvement over the lower activity in November and December of this year that would occur in January, say, of next year. And we even saw that last year when things were deteriorating. We saw January pick up.
I think that we still have 2.5 months on hand with respect to tons and that's based on September shipments. The turn number that Karla gave you is based on an annual amount and it's based on dollars as opposed to tons. But with the pricing changes this year, we've tried to really manage our inventories with more tons in mind and what that represents.
We still have some areas where we need to work down some tons. Some of our businesses are turning 6, 8, 10, 12 or more times depending upon their product, but we have some that are still turning below where we would like them to be. So, those are the places where we believe that we can still get some more money out of our inventories, more tons out of our inventories.
Also, the dollars that we're thinking will come out of inventory are mainly due to even if the tons stay the same we're replacing those tons with cheaper prices today than what we're selling at this time. So, the net effect of that is to have inventory reduced.
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