US WFB prices are expected to decrease at least as sharply as the RMS again this month, but chances are great that the decrease may be as much as the merchant bars price declines that were announced recently.
The Raw Materials Surcharge (RMS) has decreased by$25 /long ton (lt) this month, due to the softening shredded scrap prices, and American beam producers are expected to reduce WFB transaction prices by at least the same amount. However, mills could lower prices by as much as a total of $5.00 cwt. ($110 /mt or $100 /nt), either in the same announcement as the RMS decrease or separately a couple weeks later, to prevent service center transactions from being conducted at significantly below the mill price level, and to keep pace with domestic merchant bar prices, which is currently about $8.00 cwt. lower than WFB prices on base sizes.
For the next few days, however, current domestic standard-sized beam (ASTM A992, W10 x 10, W18 x 6, W24 x 7) prices will remain at $43.70 cwt. ($964 /mt or $874 /nt) FOB mill. Anticipating an official decrease announcement any day, many buyers are expecting to be able to negotiate discounts ahead of the announcement, as mills are operating at significantly reduced capacity.
On a positive note, President Barack Obama officially awarded the first US economic stimulus plan-funded highway construction bid last week, allowing states to immediately begin using their portion of the $28 billion of the stimulus funding dedicated to road and bridge construction, in which WFBs are prominently used. Results may not be seen immediately; however, the funding will provide a moderate backbone for WFB sales over the next couple years.
On the import side, most foreign WFB offers, most notably European, to the US are in the low-to-mid-$30s cwt. and trending slightly downward. Most foreign WFB sources have become increasingly quiet over the last several weeks, as it is apparent that US domestic mills are aggressively seeking out any foreign offers and will not likely allow an import offer beat them on price. Many foreign countries are also becoming increasingly wary about the potential of US mills filing antidumping suits against them. West Coast import offers have also dried up. Taiwan, in particular, has been a regular supplier to the West Coast but has recently advised customers that they are currently not in the market for exports to the US.
According to data from the US Import Administration, tonnage of H beams arriving in the US from Taiwan totaled only 2.5 mt in February, after importing over 18,000 mt in January. South Korea imported more than half of all imported WFBs to the US during February with 4,722 mt out of a total 6,629 mt.