Localized price battles aside, the US wide flange beam (WFB) market is relatively quiet, with weak demand, stable list prices and virtual silence from overseas.
The US wide flange beam market was the setting of a mini price war last week, as the top domestic beam mills sent letters to their customers indicating a $4.00 cwt. ($88/mt or $80/nt) decrease in pricing for a handful of WFB sizes "to reflect a domestic competitor's unpublished transaction prices", as one major mill put it. The significant drop in pricing did not inspire a flurry of purchasing, and despite some fears that the move would drag down the price of other sizes as well, it is expected to be a singular situation that will not affect other products.
Demand remains mostly sluggish, especially after last month's restocking ahead of a price increase that never happened; although scrap pricing went down, WFB mills raised their base prices to compensate. Even so, WFB service centers restocked less in April than in March. According to the latest MSCI Metals Activity Report, month-ending inventory levels decreased month-on-month, with 518,600 nt in April compared to 555,700 nt in March. Monthly shipments also fell to 225,800 nt in April, 12,700 nt less than March shipments.
According to various statistical data, construction demand is on the rise. Project spending is up, construction unemployment dropped down to 21.8 percent in April from March's level of 24.9 (even though the general US unemployment rate rose from 9.7 to 9.9 percent), and stimulus funds are finally starting to trickle down to the long products market. Unfortunately, the WFB market seems to be left out. Service centers report very weak business, and many are operating on a day-to-day basis. Domestic mills have been able to hold their prices, but some in the industry worry that if demand for WFB does not improve by the summer, one of the major mills will break rank and lower their prices just to get product out the door.
For now, mill asking prices for WFB are $38.50 cwt. ($849/mt or $770/nt) ex-mill for ASTM A992, W10 x 10, W18 x 6, and W24 x 7. The sizes included in the $4.00 cwt. ($88/mt or $80/nt) price cut are W4 x 13, W6 x 8.5, W6 x 9, W6 x 12, W6 x 16, W8 x 10, W8 x 13, and W8 x 15.
The import market has remained as quiet as last month-domestic customers are buying on an as-needed basis, and they are not interested in long lead times, despite the price of imports. There has been speculation that European WFB prices might come down soon, but domestic demand must pick up before US buyers will show interest.
Attractive import offers earlier in the year, combined restocking ahead of the spring construction season (which started up later than anticipated), are reflected in a surge of April imports. According to the latest import data from the US Import Monitoring and Analysis System (SIMA), 21,491.6 mt of wide flange beams were imported to the US in April (license data), a substantial increase from March levels of 11,824.0 mt. This month's data, as of May 18, only show 14,277.2 mt of WFB, and June levels will likely reflect more of a decrease.
Korea and Luxembourg continued to be the top importers of WFB to the US, with levels of 9,315.3 mt and 6,685.6 mt, respectively. Germany's imports into the US surged in April, with 3,015.0 mt compared to March's paltry 18.5 mt. Additionally, the United Kingdom nearly tripled the amount of WFB imported to the US, with 1,333.9 mt, and preliminary data for May already show 1,823.3 mt.