While most wide flange beam (WFB) distributors were anticipating a significant domestic price decrease sometime this month, the official price announcement this week was a little steeper than most expected.
Nucor-Yamato told customers Tuesday that effective immediately, (as of April 7, 2009), the company has lowered WFB transaction prices by $7.70 cwt. ($170 /mt or $154 /nt), bringing all standard-sized beam (ASTM A992, W10 x 10, W18 x 6, W24 x 7) prices to $34.75 cwt. ($695 /nt or $766 /mt) FOB mill. The company noted that it reduced prices as a result of competitors providing significant discounts and offers well below official prices to customers and because of lower import offers; however, it also said that it will leave transaction prices unchanged for May 1, regardless of the new raw materials surcharge (RMS) that will be released later this month.
While Nucor-Yamato may be true to its word and not officially lower prices any further this month, many distributors believe that the bottom is still at least $3.00 cwt. to $5.00 ($66 /mt to $110 /mt or $60 /nt to $100 /nt) from being reached, with further decreases taking place in June and July, due to weak demand and the fact that serious buyers will continue to look for discounts on sizable orders. Furthermore, domestic WFB mills may feel pressured to lower prices again if low-priced import offers continue to appear.
That said, Europe is really the only competitive import source offering WFB products to the US. Although most traders continue to struggle to book orders in this downward trending market given the long European lead times that are currently for June and July shipments, most European import offers are currently in the high $20s cwt., which may be competitive enough to generate some buyer interest. Nonetheless, domestic US mills are very aggressive these days and have increased their awareness of serious import offers to the US, and may be willing to drop offers below $30.00 cwt. ($661 /mt or $600 /nt) to steal business away from the foreign competition.
According to data from the US Import Administration, overall import tonnage of H beams arriving in the US has dropped off dramatically over the first three months of the year, with January, at 43,309 mt; February, at 6,632; and March, at only 3,643 mt.