Wide flange beams are still the shining star in the otherwise sluggish North American steel market, with prices remaining steady for another month.
Future rollings are filling up quickly, forcing producers to put customers on allocation. Nucor, the leading WFB producer in North America, appears to be booked well into October and is hoping to fill their third cycle of rolling within the next couple of months to finish the year. Lighter sections, produced by the three major beam producers in the US, are more abundant in the market. However, proprietary sections that only Nucor Yamato produces are still very tight.
Although it has weakened slightly, the non-residential construction market has kept demand relatively strong for larger structural steel products. For example, industrial construction for energy sector projects is keeping demand for heavy sections afloat. However, steel service centers are experiencing slower sales for commercial construction projects, such as schools, hospitals and shopping centers - structures that are related to residential construction. Also, inventory levels are pretty high, and the competition between service centers is getting fierce.
The second-largest supplier of structural steel products in North America, Chaparral Steel, with a capacity of approximately 2.8 million net tons of steel per year, announced last week that is has entered into a definitive agreement to be acquired by Gerdau Ameristeel Corporation. Approved unanimously by the boards of both companies, Gerdau agreed to buy the steel producer for $4.22 billion. The closing of the deal is expected by the end of this year. The acquisition "will add high-value steel products to Gerdau Ameristeel's portfolio," said Mario Longhi, CEO of Gerdau Ameristeel, in a statement. The effect of this move on the structural steel community is yet to be known; however, most beam specialists believe that in terms of production and capacity, things will pretty much remain the same.
Gerdau Ameristeel has been a good follower of Nucor's pricing announcments on merchant bars and rebars, and the new acquisition may bring further pricing discipline to the beam market.
With the scrap market trending sideways, domestic wide flange beam pricing has not seen any movement since the last month. In fact, beam prices remained stable throughout Nucor's second cycle of rolling for four months. A representative at Nucor-Yamato confirmed to SteelOrbis today that transaction prices for August will also remain at July levels.
Current published prices for standard sized wide flange beams (ASTM A992, W10 x 10, W18 x 6, W24 x 7) range from $38.25 cwt. to $38.50 cwt. ($843 /mt to $849 /mt or $765 /nt to $770 /nt) FOB mill.
The import market has been continually slow, not primarily due to the lack of demand, but because of the high import prices being offered. In particular, the Taiwanese and Chinese are back in the market with higher prices, though booking has been very light. Chinese mills are offering higher prices due to the newly-implemented export tax of 10 percent.
Most import offers range from $38.50 cwt to 40.00 cwt. ($849 /mt to $871 /mt or $770 /nt to $800 /nt) FOB Gulf and West Coast ports, with little to no takers. Prices have been dangerously close to domestic prices on a delivered basis.
Luxembourg has been a steady exporter to the US, while Taiwan and China have fluctuated drastically in tonnage from month to month.
Data from the US Import Administration show for the four-month span from April '07 to July '07 (data compiled up through July 17), Luxembourg, although not always the main H-beam exporter to the US, had steady tonnage arriving in the US each month. In April, May, June, and July, tonnage from Luxembourg totaled 7,511 mt, 7,773 mt, 8,400 mt, and 3,531 mt respectively. Taiwan and China however had some slower months with 88.8 mt and 122 mt arriving to the US respectively while stronger months were in the proximity of 10,000 mt and 5,000 mt. Import quantities remain insignificant compared to domestic production levels, so there is not any current threat of domestic mills implementing "Foreign Fighter" programs.