Although US domestic WFB purchasing activity seemed to pick up last month, demand has quieted down and spot deals have been reported under mills' listed prices.
Official US domestic mill asking prices for wide flange beams (WFB) have remained neutral for five months in a row, but while the stability in the market was welcomed by buyers and led to steady-to-increasing purchasing activity levels, the positive trend has evidently stalled. Sources tell SteelOrbis that transaction prices are soft, and some deals have been reported at about $1.00 cwt. ($22/mt or $20/nt) less than listed mill prices of $45.00 cwt. ($992/mt or $900/nt) ex-mill (for ASTM A992, W10 x 10, W18 x 6, and W24 x 7). Early speculation for shredded scrap pricing next month points at a sideways or possibly upward trend, but if scrap levels out, domestic WFB base prices might be vulnerable to a slight decrease.
According to sources, daily US service center shipments of WFB have been on the wane this month, even though April data showed improvement as predicted in our last report. According to the latest MSCI Metals Activity Report, daily beam shipments from service centers increased from 9,500 nt in March to 10,100 nt in April, while month-ending inventories also rose from 577,000 nt in March to 591,600 nt in April. Beam service centers might have been stocking up in anticipation of higher demand levels (with increased daily shipments as their proof), but unfortunately, the tide has turned slightly and May data will likely show continued increases in month-ending inventories along with a slip in daily shipments.
On the import side, inquiry activity is not strong, but not entirely negligible considering the drop in import offer prices in the last month. Current WFB offers from Korea are now below $44.00 cwt. ($970/mt or $880/nt) duty-paid FOB load truck in West Coast ports, reflecting a $2.00-$3.00 ($44-$66/mt or $40-$60/nt) decrease from last month. Offers from Taiwan are also being entertained at roughly the same level, and even though they are now comparable to US domestic spot offers, industry insiders indicate that import prices could continue to drop.
As for imports currently arriving in the US, May has already shown improved levels of H-sections-the US imported 14,122 mt in April compared to 16,313 mt as of May 25. Korea continued to be the number one source of imported H-sections, with 6,847 mt so far in May compared to Luxembourg's 6,153 mt and Spain's 3,196 mt. Imported I-sections have seen similar increases this month, with 9,801 mt imported so far in May, compared to 8,495 mt in April. Luxembourg is still the number one source of I-sections, with 4,203 mt this month compared to Spain's 4,007 mt, but South Africa, which was the number two source of I-sections in March with 4,805 mt, dropped off completely in April and has stayed quiet this month as well.