Wide flange beams (WFB) are still the strongest steel product, evident from the steady demand, busy domestic mills, and tight availability.
The non-residential construction market is still doing well, strengthening demand for beams to the point that mills are having a hard time keeping up. Domestic producers are full until July or August, and are now accepting orders for customers only on a limited basis. However, large and regular customers do get a decent allocation from their usual beam mills.
As was announced by Nucor-Yamato in mid-March, wide flange beam transaction prices for April increased by $2.50 cwt. ($55 /mt or $50 /nt). After shredded scrap prices skyrocketed in March, Nucor raised its RMS to $10.15 cwt. ($224 /mt or $203 /nt) which represented a $3.50 cwt. ($77 /mt or $70 /nt) increase from March's RMS. Nucor decreased base prices by $1.00 cwt. ($22 /mt or $20 /nt), resulting in a $2.50 cwt. ($55 /mt or $50 /nt) increase in net transaction prices for WFB in April.
Published prices from both Chaparral Steel and Nucor-Yamato for standard sized wide flange beams (ASTM A992, W10 x 10, W18 x 6, W24 x 7) range from $38.25 cwt. to $38.50 cwt. ($843 /mt to $849 /mt or $765 /nt to $770 /nt) FOB mill.
Looking at the present state of the shredded scrap market, although shredded scrap prices did fall approximately $40 - $45 /long ton this week, it is believed the beam market is strong enough to withstand the drop in shredded scrap prices and that it will hold firm for another month. Market players suspect that the drop in scrap prices is more of a stabilizing measure and does not indicate that the market is taking a fall. US scrap prices have been steadily increasing since the beginning of the year and perhaps just needed to cool off for a month.
There is still a limited quantity of imports coming to the US, but the small amounts that are coming in are alleviating some of the pressure on the domestic mills. Chinese mills have been shipping to the US West, Gulf and East coasts, and have increased their offer prices by approximately $2.50 cwt. since SteelOrbis' last report three weeks ago. Billet prices are finally stabilizing. However, WFB producers are catching up with the heavy billet increases from last month.
Also, the VAT rebate issue still remains uncertain, though traders are expecting to hear a more concrete decision announced on April 15th. While nothing has been officially announced, most people predict that the rebate will be reduced to zero.
Chinese offers are now in the range of $37.00 cwt. to $38.00 cwt. ($816 /mt to $838 /mt or $740 /nt to $760 /nt) FOB ex-dock Gulf and West Coast.
Taiwanese offers are higher than Chinese offers, now ranging from $40.00 cwt. to $41.00 cwt. ($882 /mt to $904 /mt or $800 /nt to $820 /nt) FOB ex-dock Gulf and West Coast. Taiwan has a better penetration of the Middle East market, which pays more handsomely than the US.
License data from the United States Import Administration show for the month of March 2007, worldwide H-beam imports to the US totaled 30,201 mt, up from the 22,408 mt in February. The top three exporters of H sections to the US in March were: Taiwan at 17,125 mt, Luxembourg at 6,042 mt, and Korea at 5,483 mt.