US wide flange beam prices may go up at full speed

Thursday, 13 December 2007 11:25:01 (GMT+3)   |  
       

Scrap prices have increased significantly towards the end of the year, and domestic mills are now planning their next move: to increase their transaction prices for January shipments. 

Nucor-Yamato, North America's dominating wide flange beam (WFB) mill has yet to announce its plans for January shipments, although the company did send out a memo to buyers giving them a pre-warning that prices will most likely be increasing for January shipments to reflect the higher raw materials surcharge. Although Nucor did not specifically comment on how much the increase will be, it is likely that it is testing the waters to see if its customers, mainly larger fabricators, would be willing to accept the full increase. 

Most buyers believe that the product is strong enough for mills to easily obtain the full raw material price increase. Shredded scrap prices have jumped up approximately $35 /long ton since last month and are expected to keep climbing in the first quarter of next year. WFBs are currently one of the strongest steel products in the market, and it is very likely that mills will take this opportunity to up transaction prices for January by the full $35 /nt ($1.75 cwt. or $39 /mt). However, one strong argument against this is that last month when scrap prices fell, Nucor-Yamato kept WFB prices stable, meaning the company may only impose a partial increase this time around, possibly in the $15 /nt to $25 /nt ($17 /mt to $28 /mt or $0.75 cwt. to $1.25 cwt.) range. 

Wide flange beam demand has remained steady throughout this slower-than-usual year for the steel industry, as larger sizes have been needed for commercial construction projects such as bridge and highway work, schools, and shopping malls. The need for this material and the fact that raw material prices are climbing are just two factors working in the domestic mills' favor. Also, import competition is not as big a factor as in previous years. With the rising freight costs and worldwide billet price increases, WFB imports aren't coming over to the US at reasonable numbers. Most offers are very close to the domestic prices if not higher, pushing many buyers to do business with domestic mills instead. 

Current domestic published prices for standard sized wide flange beams (ASTM A992, W10 x 10, W18 x 6, W24 x 7) are now all priced at $39.35 cwt. ($868 /mt or $787 /nt) FOB mill for December shipments. With the expected increase coming later this week, prices could range closer to $41.10 cwt. ($906 /mt or $822 /nt) for January shipments. 

The outlook for the first quarter of 2008 seems to be a positive one. Prices are increasing for January shipments, and this increase will not be the last. With shredded scrap expected to continue its upward price trend, prices for WFB will likely follow suit. 

Import offers to the US are comparable to or slightly higher than domestic numbers. The two main countries offering to the US currently are Taiwan and South Korea, and both countries are offering at prices slightly higher than domestic numbers. SteelOrbis has learned that Taiwanese offers are at approximately $39.00 to $40.00 cwt. ($860 /mt to $882 /mt or $780 /nt to $800 /nt) FOB West Coast, though only certain sizes are finding acceptance.

Another import source worth mentioning is Luxembourg. Orders have been concluded for January arrivals at decently low numbers. Buyers on both the Gulf and West coasts have confirmed orders in the range of $36.00 cwt. to $37.00 cwt. ($794 /mt to $816 /mt or $720 /nt to $740 /nt) FOB Gulf and West Coasts. No new offers are available for second quarter arrivals, however, so these low numbers may already be gone. 

According to data from the US Import Administration, worldwide export tonnage of H-beams to the US totaled 17,957 mt in September 2007 and 19,214 mt in October, though November's tonnage fell, totaling 12,577 mt. Though data is only collected through December 11, 2007 thus far, the tonnage for December is only at 991 mt. 


Similar articles

Slowdown in Turkey’s steel exports continues in September

17 Sep | Steel News

Will Turkish merchant bar market receive support from cost side?

25 Jul | Longs and Billet

Gupta family to commission Romanian rebar plant by mid-2013

14 Jul | Steel News

Attendees of the SteelOrbis Steel Trade conference "look for the light"

13 Jul | Steel Matters

European merchant bar markets waits for holidays

08 Dec | Longs and Billet

Producer price hikes expected in Italy’s beam and merchant bar markets

18 Apr | Longs and Billet

US domestic beam prices up for April, imports not a factor

18 Mar | Longs and Billet

US wide flange beam market likely to see more increases

28 Jan | Longs and Billet

45th week CIS market review: Deadlock finally broken in Black Sea region scrap market

14 Nov | Steel Matters

44th CIS market review: Scrap purchase activity rises in Black Sea region

07 Nov | Steel Matters