Lackluster demand, negligible import activity and one failed attempt at a price increase all spell a dismal Q4 for the US wide flange beam market.
On each coast of the US and most places in between, WFB purchasing activity seems to be limited to small projects while the large, "bread and butter" end-use opportunities are few and far between. In fact, some distributors have reported that they are done buying for the year, and their outlook for next year is anything but bright. US President Obama's recently-announced American Jobs Act, which proposes to spend $105 billion on public works projects, has been supported by many in the steel and construction industries, but sources on the distributor level of the supply chain are not convinced that the bill will stimulate any more infrastructure projects than the last stimulus package did--if it even gets approved in Congress.
Nevertheless, prices in the US domestic WFB market have not suffered from the weakened demand, and another month of sideways scrap pricing has subsequently resulted in another month of neutral WFB prices, settling at the level of $42.00 cwt. ($926/mt or $840/nt) ex-Midwest mill (for ASTM A992, W10 x 10, W18 x 6, and W24 x 7). To absolutely no one's surprise, an ill-advised attempt at a $1.00 cwt. ($22/mt or $20/nt) price increase by Gerdau Long Steel North America (to be effective September 19) fell flat long before Gerdau eventually admitted early this week that the beam increase was rescinded due to "market conditions" (that is to say, the market collectively turning its back on the preposterous idea that beam prices were increasable). As long as scrap remains relatively stable (another sideways trend has already been predicted for October), domestic mills will likely be able to keep beam prices from slipping, especially since there is virtually no competition from the import market right now.
US beam buyers are reluctant enough to purchase on the domestic market, let alone overseas where lead times are deep into the end of the year. Plus, prices are not exactly attractive, and import sources do not seem to have enough interest in the US market right now to offer any sort of alluring deals. As such, current offer prices from Korea have not changed in the last month, remaining at $44.00-$45.00 cwt. ($970-$992/mt or $880-$900/nt) DDP load truck in Gulf Coast ports, and approximately $1.00 cwt. higher on the West Coast. Additionally, WFB offers from Spain are in the range of $43.00-$44.00 cwt. ($947-$970/mt or $860-$880/nt) DDP load truck in Gulf Coast ports, but traders tell SteelOrbis that inquiry activity into either source is stagnant for now.
Arriving imports into the US are also headed toward a likely downward trend, with the US importing only 26,105 mt of beams as of September 20 compared to 38,093 mt in August, according to license data from the US Steel Import Monitoring and Analysis System (SIMA). Split into products, the decrease in imports is even more dramatic. I-beam shipment so far in September total 2,608 mt, compared to 7,381 mt in August, and there doesn't seem to be a chance for September totals to catch up, especially since the usual number one source has not made much of a showing this month-the US has only imported a paltry 146 mt of beams from Luxembourg this month compared to 3,286 mt in August. Mexico, on the other hand, also registered a decrease in import levels to the US, but not as substantial; imports totaled 1,486 mt so far in September compared to 2,577 in August. The only country to show an increase in September is Spain, which has been the source of 738 mt so far this month, compared to a negligible 27 mt in August.
H-sections are also struggling to catch up this month, with a total of 8,268 mt so far compared to 10,885 mt in August. Korea and Luxembourg understandably registered lower totals month-on-month, with the US importing 4,517 mt from Korea as of September 20 compared to 5,223 mt in August, and 1,064 mt from Luxembourg this month compared to 3,683 mt last month. As with I-beams, the US has imported more beams from Spain month-on-month, with a total of 1,520 mt so far in September compared to only 816 mt in August.