After a huge $7.70 cwt. ($170 /mt or $154 /nt) decrease earlier this month, US mills have announced that they will leave wide flange beam (WFB) prices unchanged for May, providing at least some price stability in the market for the first time in several months. However, demand for beam products is still dismal and buyers still expect more modest price decreases to come.
List price of wide flange beams (ASTM A992, W10 x 10, W18 x 6, W24 x 7) will remain at $34.75 cwt. ($695 /nt or $766 /mt) FOB mill. The big price decrease announced by Nucor earlier this month was part of an effort to eliminate off-list price deals extended by Nucors' competitors, Gerdau Ameristeel and SDI. After the official price decrease, these discounts have been, by and large, eliminated and prices on the distributor level have seemingly stabilized. While Nucor's intentions are to preserve the integrity of the list prices, as long as beam prices are significantly higher than those of other steel products and demand remains disappointing, there will be special deals concluded under list prices.
Service centers are certainly not happy about this major devaluation of their inventory and all of them are accumulating huge losses. De-stocking activity is still taking place and there is no interest for import orders.
In this gloomy environment, the only positive sign is the firming raw materials market, namely scrap. Scrap prices are showing some signs of life after a strengthening in demand for exports. This should give a boost to beam prices as well; nevertheless, regardless of what the raw materials are doing, distributors believe that mills will eventually be forced to lower prices again, by up to another $2.00 c wt. ($44 /mt or $40 /nt), perhaps even before June, as a result of the global economy and the continued lack of demand in the WFB market.
On the import side, traders continue to struggle to generate serious buyer interest due to fluctuating US mill prices and lead times. Recent European offers from ArcelorMittal at below $30.00 cwt. ($660 /mt or $600 /nt) didn't go anywhere as there were no significant bookings. Mexico is also offering below $30.00 cwt. ($660 /mt or $600 /nt) and probably booking some minor tonnage at regions close to the border. Mexican products remain limited in size range and are only available in 40-foot lengths.
For the West Coast, Taiwan, which has been a regular supplier in the past, has been quiet this year aside from a single arrival in January. Korea was offering but couldn't collect any orders and was forced to rescind the offer. Overall, the US market remains a lonely playground for American steel mills, even though they always cite imports for price instability.
According to license data from the US DOC, while Luxembourg imports of H beams to the US totaled only 695 mt in March, April imports to date have already totaled an estimated 1,614 mt.