The North American beam market is still sailing on calm seas with demand and supply in sync with one another.
Nucor-Yamato is still implementing its controlled order entry program, but they probably will not be overbooked under the current conditions if they forego the allocations.
Last month, after two back-to-back price increases, Nucor kept wide flange beam (WFB) transaction prices flat for November shipments. While the September price increase was only for certain sizes, reflecting the cost of production and market conditions, October's price increase was more due to a rising raw materials surcharge (RMS).
Currently, for November shipments, WFB transaction prices are stable. Nucor-Yamato did not change its November RMS as shredded scrap prices in October did not budge. The company's current RMS is $6.65 cwt. ($133 /nt or $147 /mt), but is expected to decrease for December shipments. The scrap market has softened slightly since last month and auto bundle prices recently dropped by approximately $20 to $30 /long ton. Shredded scrap prices will most likely fall, lowering Nucor's RMS, but wide flange beam prices are expected to hold firm in December.
The market for wide flange beams, though slightly down from previous months, is still relatively strong. The demand is perhaps less than it was in 2006 but is certainly stronger than it was in 2005. Mills are busy, and lead times are pushed out well into the first quarter for some sizes. For larger sizes, the company's proposed rolling schedule is even indicating that controlled order entry will near the end of its 4th cycle in February 2008.
With busy months ahead, the WFB market may move from relatively strong to robust, as it was this time last year. Import competition is minimal, and larger sizes are still in high demand. Expectations for 2008 seem to be mostly positive, and price increases are expected, with mills citing high transportation costs for their raw materials such as pig iron.
Current domestic published prices for standard sized wide flange beams (ASTM A992, W10 x 10, W18 x 6, W24 x 7) are now all pricing at $39.35 cwt. ($868 /mt or $787 /nt) FOB mill.
With freight prices increasing and traders offering US buyers prices very close to the domestic numbers, imports are a rarity. There are not many beams arriving to the US, and offers for first quarter arrivals are minimal as well. Occasionally, offers from Taiwan and China appear, though there are not many takers, and mills sometimes change their minds and pull out their offers. The most reliable and frequent supplier to the West Coast has been Taiwan, but they are still struggling find homes for its tonnage in the US market as it is paying less than the rest of the world. European prices do not make any sense at all due to the unfavorable exchange rate.
According to data from the US Import Administration, worldwide export tonnage of H-beams to the US totaled 17,957 mt and 18,858 mt for September and October respectively, down approximately 10,000 mt from the 27,401 mt shipped in August. The three major exporters to the US in October were: Taiwan at 11,382 mt, Luxembourg at 3,112 mt, and South Korea at 2,742 mt.