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Buyers welcome flat beam tag outlook

Keywords: Tags  steel beams, wide-flange beams, prices, pricing trends, flat pricing, pricing outlook, regional markets, ferrous scrap prices Frank Haflich

LOS ANGELES — The failure of a benchmark scrap price to budge from last month’s level has left most buyers of wide-flange steel beams expecting flat pricing going forward—and most of them are OK with that outlook.

With products ranging from flat-rolled steel to structural tubing to cold-finished bar now looking vulnerable to price erosion despite mills’ price increase announcements, flat but stable pricing is a preferred alternative, say some market sources.

"If we can’t get the price up, then I’ll be happy with flat," said a Midwest service center buyer.

This past week, AMM held its consumer buying price for the Chicago market—a key component of some mills’ raw materials surcharges—at $430 per ton for the second consecutive month. Last month, an unchanged scrap price led producers to hold the published f.o.b. mill price for core beam sizes at $840 per ton ($42 per hundredweight), although discounts to some buyers were reported as high as $60 per ton ($3 per cwt) on a delivered basis.

While a number of market sources have seen their beam business move up 3 percent to 4 percent over this time last year, geography has a heavy influence on pricing trends with Gulf states in particular reporting healthy energy-related demand, while some service centers on the West Coast are seeing little, if any, improvement over 2011. Certain niche markets, such as mining in the intermountain West region, are strong.

"I’m not expecting the price of beams to go anywhere anytime soon," said a Southeast service center buyer, who also has seen a pickup this year that he isn’t sure will last through the second quarter. "I don’t think demand will collapse, but I’m not necessarily looking for a continual uptick."

"I’m not sure what’s driving this, but beam orders are my strongest this month," said the long products buyer for a Midwestern distributor.

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