US domestic beam market still sizzling

With mills full until mid to late December and demand remaining very strong, wide flange beam availability is scarce. The non-residential construction market is booming, so demand for wide flange beams is extremely high, and mills cannot keep up. Domestic beam producers were not prepared for demand so high that has caused almost a panic buying among fabricators. Producers are now controlling order taking from customers, and with mills full until December, they are only accepting orders on a very limited basis. It is believed that this frantic buying activity will slow down within the next few months. Service centers are now beginning to build their beam inventories, and come first quarter, the WFB market will calm down a bit. The demand will still be there, but inventories will be healthy enough by January to hopefully alleviate the mills' need for customer allocation, and the current chaos will subside. In terms of pricing, with the scrap market trending down, Nucor lowered their Raw Material Surcharge to $3.65 cwt., but stabilized prices by raising base prices for beams, keeping net prices at August levels. Domestic prices for standard sized wide flange beams (ASTM A992, W10 x 10, W18 x 6, W24 x 7) still range from $33.25 cwt. to $33.50 cwt. ($733 /mt to $739 /mt or $665 /nt to $670 /nt) FOB mill. Chaparral's beam prices will still remain $20 /nt higher than their competitors, Nucor and SDI. Chaparral announced their September RMS at $3.80, offsetting the negative jump by a positive move in base prices, keeping transaction prices at August levels, which are still $20 /nt higher priced than Nucor's. Chaparral announced early in August their $20 /nt increase for wide flange beams, which has since gained acceptance in the market. Even though customers would rather pay the lesser price, demand is so high right now, and distributors are eager to buy. On the import side, there is a limited quantity of imports coming to the US, certainly not enough to upset the domestic industry. Normally, domestic producers are very sensitive to imports, but wich such high demand, they don't mind getting some help from import tonnage right now. There are very few countries offering beams right now to the US. China and Taiwan are shipping beams to the West Coast with offers at approximately $33.00 cwt. ($728 /mt or $660 /nt). Gulf ports have seen small shipments from Poland and Brazil, plus the usual Arcelor mills in Europe. Final census data from the United States Import Administration shows for the months of June, July, and up through August 16, 2006 the top five exporters of H sections to the US were: Taiwan at 30,283.6 mt, Luxembourg at 11,664.8 mt, Korea at 7,498.2 mt, Brazil at 2,882.2 mt, and Spain at 2,874.6 mt.