US WFB market maintains its strength

The beam market has been sailing along these last few months and has maintained its strength, despite a generally slow fourth quarter for the steel markets. With the first quarter of 2007 approaching and some steel products being in a bit of a December slump, people are wondering how things will pan out for the New Year. For wide flange beams (WFB), the market is fairly strong, and most buyers believe it will remain that way. Despite the winter months ahead, the non-residential construction sector is still robust. Demand for beams is strong and domestic mills are still busy. As announced by Nucor-Yamato in mid-November, WFB transaction prices for December have remained unchanged. As shredded scrap prices fell in November, Nucor lowered its RMS to $2.90 cwt. ($58 /nt) which represented a $0.75 cwt. ($15 /nt) decrease for December shipments. However, they also made a corresponding upward adjustment to base prices, representing no change in the net transaction prices for WFB in December. The question is though, what will Nucor do for January shipments? Looking at the present state of the shredded scrap market, with prices increasing slightly from November prices, WFB prices are likely to remain unchanged for yet another month. Nucor will be hesitant to raise prices if scrap prices don't increase any further in December. Under the current conditions, the most likely scenario is that beam prices will remain the same for December. 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. Major beam exporters to the US West Coast, China and Taiwan, have adjusted their beam prices downwards recently. As import prices were on the high side and very close to domestic prices, buyers asked for price breaks in order to buy imports in decent tonnages, and most of them were successful. Unlike a few months ago, when buyers were eager to grab any beams they could get their hands on, they are being more cautious now. The panic is gone now, and buyers are shopping around, looking for the best import price. China and Taiwan are shipping to the West Coast, with offers at $32.00 cwt. to $33.00 cwt. ($705 /mt to $728 /mt or $640 /nt to $660 nt) FOB ex-dock West Coast - a $1.00 cwt. decrease from our last report. Gulf Coast ports have seen shipments from Poland and Brazil, as well as from the usual Arcelor-Mittal mills in Europe. Census data from the United States Import Administration shows that for the months of September, October, and November, the top three exporters of H sections to the US were: Taiwan at 23,037 mt, Luxembourg at 14,087, and Korea at 10,341. It is worth noting that most of Taiwan's total tonnage for this three-month span was shipped to the US in September. A minimal amount of tonnage from Taiwan was shipped in October and November.