US beam market is humming along

Although the US is in the middle of a slow fourth quarter, the wide flange beam market continues to maintain its strength with stable prices and decent demand. With demand dictating the market trend, wide flange beams and pipe are the two strongest steel products at this time. Demand for beams remains strong, and the mills are still busy. The non-residential construction market is still hanging on despite the approaching winter months. The frantic buying activity we saw two months ago, however, has subsided. Producers have caught up with demand, and there is no longer the beam shortage we saw in the past. Customers are able to procure most of what they need from domestic mills. Domestic wide flange beam prices have remained stable for the past few months. Nucor announced in mid-October that although they were dropping their raw materials surcharge (RMS) by $15 /nt ($0.75 cwt.) for November shipments, a corresponding upward adjustment would be made to base prices, thus keeping transaction prices at the same level for November. 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. Even with a weakening scrap market, the domestic WFB market was strong enough to hold onto its prices last month, unlike rebar, merchant bar, and other structurals, which took a $15 /nt hit. This month, however, the scrap market has weakened further, with shredded scrap prices down once again. Although the WFB market is strong, it might not be strong enough to withstand another drop in scrap prices, which could lead to a small decrease in WFB prices. Imports to the US are still limited. Buyers are purchasing imports, but are not as eager to snatch them up as they were a few months ago. Now that the panic has subsided and beams are more readily available, buyers are shopping with more caution, only buying if the price is right. Market players want to find a better price if they are buying imports; otherwise they will stick to buying domestic beams. China and Taiwan are shipping to the West Coast, with offers at $33.00 cwt. to $34.00 cwt. ($728 /mt to $750 /mt or $660 /nt to $680 nt) FOB. Gulf Coast ports have seen shipments from Poland and Brazil, as well as from the usual Arcelor-Mittal mills in Europe. Wide flange beam imports to the US dropped by approximately 33,000 mt from September to October 2006 according to data from the US Department of Commerce's Import Administration. The major exporters to the US for the month of October were Luxembourg with 3,013 mt, Poland with 2,227 mt, and Mexico with 1,173 mt. The big exporters in September - namely; Taiwan, Korea and China - did not have any major shipments in October. It is also worthy to note the new imports of Mexican wide flange beams, which had been virtually absent from the US market in the past. Now that steel demand has plummeted in Mexico, Ahmsa - the sole producer in Mexico - is looking for a new market in the US.