Despite the continued lack of US demand for wide flange beam (WFB) products and availability of low-priced import offers, leading American WFB minimill Nucor-Yamato has announced a $1.00 cwt. ($22 /mt or $22 /nt) transaction price increase for WFB, effective June 1.
While many distributors believed, prior to the announcement, that the recent shredded scrap up-tick would prevent any further WFB price decreases for the time being, most thought that demand remained too soft to justify a price increase. However, it is evident from Nucor-Yamato's increase and Nucor Bar Mill Group's identical $1.00 cwt. increase for rebar and merchant bar, as well those of other competing minimills such as Gerdau Ameristeel and SDI, that producers are confident that there isn't any real threat from imports and that demand is strong enough to recover at least some of their increased raw material costs.
As a result of Nucor-Yamato's $1.00 cwt. price hike, the list price of wide flange beams (ASTM A992, W10 x 10, W18 x 6, W24 x 7) has increased to $35.75 cwt. ($788 /mt or $715 /nt) FOB mill. This increase should provide a little more confidence to distributors, especially considering that Nucor-Yamato had announced a staggering $7.70 cwt. ($170 /mt or $154 /nt) decrease in early April. Nonetheless, while list prices are expected to trend neutral over at least the next couple weeks, customers will likely still have the upper hand in negotiating prices on sizable orders, depending on product specifics, due to the continued weak demand in the market.
Moving forward, domestic prices are generally not expected to see any more increases until demand improves, which may not happen until the third or fourth quarter. And while it seems as though domestic WFB mills' strategy is to resist further price decreases, if import offers remain significantly lower than US domestic or raw material prices start to trend down again, US producers will face downward price pressure.
Most buyers and distributors contest that import offers are not a real threat to US domestic mills regardless of price, due to the lack of overall demand and domestic mills' speedy lead times. Nonetheless, European offers from ArcelorMittal have recently been seen at around $27.00 cwt. to $28.00 cwt. ($595 /mt to $617 /mt or $540 /nt to $560 /nt) FOB US ports. Again, import booking activity remains very light, and the US WFB market continues to be dominated by the domestic mills. Still, competitive import offers are available, and domestic mills are undoubtedly keeping watch.
According to license data from the US DOC, imports of H-beams to the US totaled 4,081 mt in April, up from 3,643 mt in March. However, import licenses for WFB are only at 596 mt mid-way through May.