For the top three US domestic wide flange beam mills, June saw month-long struggles to see who would be the market trend setter for July.
Traditionally, Nucor-Yamato has led the wide flange beam market in terms of price announcements--they are typically the first to announce monthly decreases or increases, which other mills soon follow. However, on the first day of June, Steel Dynamics, Inc. surprised the US domestic WFB market with an immediate $4.00 cwt. ($88/mt or $80/nt) decrease in beam tags, and Nucor and Gerdau Long Steel North America had no choice but to mimic the move. The surprise came not only from the timing--monthly scrap prices had not even been announced--but what the decrease said about the market (at the time, activity was relatively steady).
However, once a slight uptrend in shredded scrap pricing was announced a few days later, Nucor did not waste time releasing a $1.50 cwt. ($33/mt or $30/nt) increase to WFB transaction prices. Gerdau followed soon after with a similar $1.50 cwt. increase, but when it was SDI's turn, they only raised prices $1.00 cwt. ($22/mt or $20/nt). While some saw this move as an attempt by SDI to undercut Nucor, sources tell SteelOrbis that it was also in retaliation to Nucor's pricing policies for other long products, namely rebar. In June, SDI was likely hoping to follow Gerdau's $1.50 cwt. increase on rebar, but Nucor announced a $1.00 cwt. increase instead, forcing SDI to match. The June beam story was not over, however--both Nucor and Gerdau caved to SDI's WFB pricing for July and sent letters to customers in the last days of the month, scaling back their originally-announced increase by $0.50 cwt. Therefore, WFB prices for July shipments will be $42.00 cwt. ($926/mt or $840/nt) ex-mill (for ASTM A992, W10 x 10, W18 x 6, and W24 x 7).
Despite the unusual show of one-upmanship in the US beam market, it seems highly likely that all three domestic mills will see no resistance getting the $1.00 cwt. increase for July. Demand is steady, and despite the traditional summer lull, there seem to be indicators that activity could strengthen as Q3 progresses. According to the US Census Bureau, building permits increased in May, by 8.7 percent compared to April and 5.2 percent compared to May 2010. Additionally, daily shipments from service centers increased in May to the highest levels since November 2008, reaching 11,000 nt compared to April's 10,100 nt, according to the latest MSCI Metals Activity Report. Month-ending inventory levels also increased in May, to 626,800 nt, and while large inventories in a recovering market are not always a good thing, it is important to note that May's level is the highest since March 2009, indicating possible optimism in the beam sector.
However, any optimism is not strong enough for US buyers to seriously consider imports for the moment--US domestic prices in July will be $3.00 cwt. ($66/mt or $60/nt) less than they were a month ago, and import offers have not exactly caught up. In fact, current offers from Korea have increased approximately $2.00 cwt. ($44/mt or $40/nt) in the last month, bringing offers up to $46.00 cwt. ($1,014/mt or $920/nt) DDP load truck in West Coast ports, and closer to $44.00 cwt. ($970/mt or $880/nt) in the Gulf.
As for imports currently arriving into the US, license data from the US Steel Import Monitoring and Analysis System (SIMA) note that the US imported more beams overall in May than April, and June is shaping up to beat May levels as well. H-sections arriving into the US totaled 18,871 mt in May compared to 14,151 mt in April, and as of June 28, license data show 31,414 mt for the month. Korea remained the top import source for H-sections in June, with 11,664 mt, followed by Luxembourg (7,410 mt), Taiwan (5,670 mt) and Spain (4,534 mt). The I-section import market did not see a similar boost in June, while still trending up in May from April. According to SIMA, the US imported 13,888 mt of I-sections in May, compared to 8,495 mt in April, while June levels only reached 9,556 mt as of June 28. As for top sources of I-beams, Luxembourg regained its top spot in June with 5,115 mt, followed by Japan (1,344 mt--coming off months of inactivity) and Mexico (1,154 mt).