While US longs producers are not officially lowering wide flange beams (WFB) transaction prices this month as they have with some other long products, the positive price momentum for US domestic WFB seems to have dissipated.
In its $40/nt ($44/mt or $2.00 cwt.) transaction price decrease announcement for merchant bar and structural products released in the first week of September, Nucor Bar Mill Group explicitly excluded WFB products produced at its Nucor-Yamato mill. However, neither Nucor nor fellow US WFB producer Steel Dynamics Inc. (SDI) have announced a transaction price increase for WFB to reflect the $20/long ton increase in raw material (US shredded scrap) prices this month.
Towards the end of last month, it was expected that US mills would pass along the increased September raw materials surcharge to WFB net prices, but as of now, WFB list prices for standard sizes (ASTM A992, W10 x 10, W18 x 6, W24 x 7) from domestic producers remain at their August level of $37.75 cwt. ($832 /mt or $755 /nt). While US mills may still come out with a price increase announcement for WFB this month, many think that the ongoing weak demand for WFB and wide gap between domestic list and actual transaction prices will cause US producers to think twice about raising list prices in line with scrap.
Buyers report that despite the list price of $37.75 cwt., actual spot prices for WFB remain at a range of $34.00 cwt. to $35.00 cwt. ($750 /mt to $772 /mt or $680 /nt to $700 /nt) ex-mill, as producers continue to discount for distributors and larger buyers in order to move product. Even with the lack of import competition, distributors say that demand remains too weak for prices to rise.
Although the US economy and housing market are both starting to show some signs of improvement, the main consuming market for WFB, the commercial/non-residential construction market, continues to slump as private construction investment is still severely down due to tight credit and low demand, as is public construction spending, due to cutbacks in state and local government budgets. US Census Bureau data released earlier this month showed that private nonresidential spending fell for the fifth month in a row in July, slumping 1.2 percent from June, after tumbling 2.2 percent the month before. Public nonresidential spending also slipped 0.8 percent from June to July as decreased spending from local and state governments offset federal stimulus funds.
Despite the soft demand conditions, the idling of US production capacities (namely, SDI's beam mill) and lack of competitive imports should help keep domestic WFB prices, more or less, stable through year-end. While there are still some import offers for WFB, they are not competitive with domestic spot prices. The most prevalent import offers of WFB have been from Europe, mostly from Luxembourg, Germany and Spain. Most competitive European offers calculate to at least $32.00 cwt. ($705 /mt or $640 /nt) FOB loaded truck US ports, and traders say that this price is not currently workable in the US market.
There are also still some offers from Korea, but they are priced even higher than the European import offers, with most offers currently at about $34.00 cwt. ($750 /mt or $680 /nt) FOB US West Coast ports and to around $35.00 cwt. ($772 /mt or $700 /nt) FOB US Gulf ports.
On the whole, import WFB offers to the US are expected to continue following the US price trend for beams, which will most likely remain sideways this month.
| Item | Spot price for US buyers | From Last Week | From last month | Pricing Trend | Comments |
| Domestic WFB | $34.50 cwt. ($760/mt) | No change | No change |
K | Ex-mill, Midwest |
| Import WFB (European origin) | $32.00 cwt. ($705/mt) | No change | No change |
K | Duty-paid, FOB loaded truck in US Gulf ports |