NEW YORK Wide-flange
steel beam buyers are awaiting new price announcements in the
wake of a hike in a scrap benchmark that they expect will
trigger a reversal of two months of declining tags.
AMM this week raised
its consumer buying price for automotive shredded scrap in the
Chicago market by $52 per ton to $387 per ton (
amm.com, Nov. 7). This rebound follows two months
of declines for the key raw material, which saw prices fall a
total of $75 per ton during that period.
Following last months
$47-a-ton drop in shredded prices, major producers lowered beam
prices by $30 per ton, putting core sizes of wide-flange beams
at $745 per ton ($37.25 per cwt) f.o.b. mill (
amm.com, Oct. 11).
But now that shredded prices are
on the rise, buyers say beam prices are due for a
Most buyers said they expect a
beam hike totaling at least half of the scrap increaseor
$26with a majority looking for a substantial increase of
$40 per ton or more. However, a few market sources argue that a
smaller hike is more likely as the mills await confirmation
next month that higher scrap pricesthus, stable beam
pricescan be sustained.
In any case, most buyers expect
mills will act quickly with the expected increase, especially
because some buyers already began to lock in material before
the new Chicago benchmark was posted amid growing speculation
that scrap prices were strengthening. Mill inventories were
reportedly sufficient to support this demand.
"If people have a need,
theyre already buying like crazy from floor stock," said
a service center executive.
"There certainly was some
hedging going on, theres no doubt about it," another
industry source agreed.
Any delay in posting new
published prices, on the other hand, could signal to the market
that producers have targeted filling their beam mills with as
many tons as possible, even if they have to do it at the old,
lower price, sources said. However, with little current threat
from imports, even in a somewhat weak domestic market, most
buyers say an increase is likely in the cards.
Another question is whether a
new price would be effective next month, as has been customary
in recent years, or immediately. Last month, Tampa, Fla.-based
Gerdau Long Steel North America said any future price change,
"whether it is a decrease or increase," will be effective
immediately upon announcement (
amm.com, Oct. 12). However, historical pricing
leader Nucor-Yamato Steel Co. hasnt publicly signed on to
this policy change, and few observers said they believe it
could fly without the support of the Blytheville, Ark.,