According to verbal reports from Nucor-Yamato, wide flange beam (WFB) prices are up $20 /nt ($1.00 cwt. or $22 /mt) for April shipments.
Following a rise in shredded scrap prices in early March, Nucor upped its April raw materials surcharge (RMS) by $21 /nt ($1.05 cwt. or $23 /mt) to $246 /nt ($12.30 cwt. or $271 /mt). The company is absorbing $1 /nt ($0.05 cwt. or $1.10 /mt) of the RMS increase by decreasing base prices by $1 /nt, which will therefore boost net transaction prices for WFB up $20 /nt ($1.00 cwt. or $22 /mt) for April shipments.
The most recent price increase will push standard sized WFB (ASTM A992, W10 x 10, W18 x 6, W24 x 7) prices up to $44.85 cwt. ($989 /mt or $897 /nt) FOB mill for April shipments.
Buyers and sellers suggest that the WFB market is decently strong. With non-residential construction projects still taking place, structural steel products have been in higher demand than their smaller-sized counterparts. Domestic WFB prices did go up following an upward move for shredded scrap prices, although WFB prices increased by $5 /nt ($0.25 cwt. or $5.51 /mt) less than those of merchant bar and rebar products, which have been said to be slightly weaker products.
The last increase was certainly less than expected and domestic beam prices have more room to increase in the upcoming months. The winter will end soon, bringing the busy spring and summer months. Demand is expected to pick up in the second and third quarters. Also, domestic mills have a lot of catching up to do with the international market. Steel prices on a global scale are sky high, leaving more room for domestic mills to raise their prices to catch up.
The only bump in the road is the deteriorating residential construction market which will eventually spill over to the commercial side as well. Also, confidence in the economy and in long-term economic growth is low, so businesses will be cautious about expanding during uncertain times. This means that a fewer number of commercial buildings will be started in 2008.
Import competition is becoming less of a factor in the US market. As freight rates are still on the high side, and worldwide billet prices are steadily increasing, WFB offers aren't coming over to the US at reasonable numbers. Most offers are higher than the domestic price, giving buyers no incentive to buy imports. There isn't a severe supply problem and, therefore, the market has not reacted to the high import numbers yet.
The import offerings that are usually available, such as Asian offers to the West Coast and European offers from the usual ArcelorMittal mills to the Gulf, are pricing out at unreasonable numbers. Taiwanese beams are still arriving, primarily to the West Coast, but these orders were fixed several months before. Some offers are said to be approximately $9.00 cwt. ($200 /mt or $181 /nt) higher than the domestic offering prices, and are finding no acceptance. South Korean offers are also absent from the market for the time being.
The majority of imports that the US has seen in the last two months have been from Taiwan and the usual European mills that ship to the Gulf region. According to the US Import Administration, worldwide export tonnage of H-beams to the US in February and March totaled 51,128 mt and 43,561 mt respectively. In February, the top five exporters to the US were: Taiwan, at 16,361 mt; South Korea, at 14,819 mt; Spain, at 7,459 mt; Germany at 5,028 mt; and Luxembourg, at 3,096 mt. In March, the top five exporters to the US were: Taiwan, at 23,929 mt; Spain, at 8,736 mt; Luxembourg, at 7,362 mt; Germany, at 1,959 mt; and Mexico, at 838 mt.