Following a $25 /nt ($1.25 cwt. or $27.56 /mt) price increase for wide flange beams (WFB) in January, Nucor-Yamato has upped transaction prices for February by another $65 /nt ($3.25 cwt. or $72 /mt).
Shredded scrap prices in January saw huge leaps as prices climbed by approximately $80 / long ton. This increase was following a slightly smaller, yet still large, increase in December, and both monthly increases translated into a rise in prices for WFB products. Nucor-Yamato announced in mid-January that prices for February would increase by a whopping $65 /nt ($3.25 cwt. or $72 /mt), the largest single increase made by mills this month.
The most recent price increase will push standard sized WFB (ASTM A992, W10 x 10, W18 x 6, W24 x 7) prices up to $43.85 cwt. ($967 /mt or $877 /nt) FOB mill for February shipments.
Market chatter suggests that this is just the beginning for domestic price increases. Most steel products in the domestic market have been seeing obscene increases so far in 2008, and with wide flange beams being one of the strongest steel products in the current market, prices are only going to increase further.
As this increase is more raw materials-driven than demand-driven, buyers are watching the scrap market closely to see what prices will do come February. However, demand for WFB has remained steady, and the February price increase did reflect the stronger demand, as WFB prices did increase slightly more than prices of products that are not as strong right now, such as merchant bar and rebar.
Import competition is becoming less of a factor in the US market. With the high freight rates and worldwide billet price increases, WFB imports aren't coming over to the US at reasonable numbers. Most offers are very close to the domestic prices, if not higher, pushing many buyers to do business with domestic mills instead.
The import offerings that are usually available, such as Asian offers to the West Coast and European offers to the Gulf, are pricing out at unreasonable numbers, leaving foreign mills reluctant to offer to US buyers.
January has been a good month for import arrivals as those orders were booked back in October/November when offers were still reasonable; however, in the second quarter import tonnage is expected to be low since there are few orders on the books for the offers this month. According to data from the US Import Administration, worldwide export tonnage of H-beams to the US totals 29,920 mt so far for the month of January 2008. The top five exporters are: South Korea at 14,801 mt, Taiwan at 4,648 mt, Germany at 4,410, UK at 2,497 mt and Luxembourg at 1,646 mt.