LOS ANGELES — The U.S. market for wide-flange steel beams is due for an influx of imports, especially from Spain.
Import license applications for the categories that primarily include beams totaled about 24,300 tonnes through the first three weeks of January, up from preliminary imports of just 7,500 tonnes for all of December, according to Commerce Department data. Monthly imports for October and November were similar to levels reported in December.
The biggest increase in license applications came from Spain, which saw applications jump to about 10,300 tonnes in the first three weeks of January from just 14 tonnes of preliminary imports in December. Applications for South Korean beam imports in January to date were about 6,600 tonnes, up tenfold from preliminary imports of just 620 tonnes in December.
The only country typically among leading exporters to the United States to see a pullback in January applications was Luxembourg, which saw applications drop to 2,370 tonnes vs. 3,570 tons in December. But a significant portion of Luxembourg’s shipments to this country are believed to include more specialized, heavy beams rather than the smaller "bread and butter" sizes typically sent by Spain and South Korea.
The single biggest chunk of Spanish beams carry a unit value of about $728 per tonne, which would translate to about $33 per hundredweight not including freight or other importing costs, sources said. Observers think this could end up at roughly $37 to $38 per cwt on the dock.
The largest segment of Korean beams were priced at about $773 per tonne, or some $35 per cwt, sources said. While these prices are higher than Spain’s, the Korean beams are thought to be arriving largely on the West Coast, which has no beam mills and must absorb freight costs from the East of $2 per ton or more on domestic beams.
While the imported beams were probably sold in late October or early November, around the time when the published domestic price for core sizes was being lowered to $41 from $42 per cwt, two increases since then have raised the official f.o.b. mill tag for February to $43.50 per cwt. Observers think it’s likely these import offers that are only now showing up in the data helped trigger domestic mill "foreign fighter" discounts that were reportedly being offered at that time.
Some market sources said it isn’t surprising that the Spanish beams were priced so aggressively, because Spain’s economy—especially its construction sector—is in a deep recession.
Moreover, Europe’s economy hasn’t recovered, while its currency has weakened. Upcoming offers expected shortly for material to arrive in April and May could prove crucial to the likelihood of future foreign fighter programs, sources added.