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Structural steel imports slow to near standstill

Keywords: Tags  structural steel, beams, angles, Port of Houston, Turkey, steel trader, construction


NEW YORK — Demand for imported structural steel products remains slim to none, but market participants anticipate a turnaround in the New Year if a solution to the fiscal cliff materializes.

Much of the difficulty in selling imports in recent months stems from the fact that imported pricing has hovered very close to domestic pricing, which discourages buyers to take the plunge with long lead times from countries such as Turkey, sources said.

That lack of a pricing advantage, coupled with a poor domestic construction sector, has caused little to no traction in the structural steel import market, sources said.

“Things have been really tough. The spreads between domestic and import are getting tighter and tighter and foreign mills don’t do a lot of rebates,” said one trader. “Demand has been really low and there’s just no confidence in the market. We’re hoping to see a bounce in 2013, but we’ll see how it goes.”

Prices for imported steel angles to the Port of Houston were reported at $680 to $720 per ton this past week, sources said, although transactions were thin on the ground. This compares with domestic prices of about $763 per ton—too small of a spread to make imported product particularly attractive, sources said.

Beam sales to the Port of Houston were reported at $720 to $760 per ton this past week, although few buyers said they were interested. This compares with domestic prices of $745 to $780 per ton.

Earlier this month, a number of structural mills raised merchant and beam tags by $35 per ton for December shipments (amm.com, Nov. 19), but most sources agreed that expected spike won’t be enough to encourage more activity in the imported market just yet.

“The (domestic) mills had to drop prices by a lot in the last few months because of scrap, so they had huge cuts and discounts. Now, with the increases, they’re back even, although nothing of this nature ever sticks,” one service center source said. “They’re trying to stop the bleeding and hoping it’ll stick. But even now, imports are certainly not playing a factor.”

Overall economic uncertainty also continues to weigh down the imported structurals market. Sources had previously said that the passing of the elections would allow for stability in the market; however, some now point to the fiscal cliff as the newest target.

“Some people have ordered a little, but it’s not anything regular. It’s nothing exciting,” said a second trader. “I don’t see serious buying. People are sitting on their hands right now, and waiting for the fiscal cliff to be over. Everyone thought the elections would have solved our problems, but Congress is still fighting even after the elections.”

Buyers cite the lack of construction activity as their main deterrent to purchasing more product.

“There are no jobs in construction right now. Everyone is waiting on the taxes to see what’s going to happen in the new year,” said the service center source. “The down cycles are much longer these days. We’ve got no inventory because we’re just burning through it.”

But it may not be all bad news for the sector. The Commerce Department said Tuesday that housing starts rose to their highest level in more than four years in October, up 3.6 percent to 894,000 units. Others added that nonresidential construction may likely pick up some six to eight months after housing, suggesting a possible turnaround in the sector.

And not everyone has felt the pains of a sluggish market. A second service center source said that activity for his company has increased “surprisingly” in recent weeks and that domestic mills seem to be showing stronger order books.

“We had a good October ... and November has been fairly steady so far,” the source added. “I don’t think anyone is loading up on inventory just yet, and I don’t think anyone has confidence in this market or the price increases lasting very long. But I think if Congress can just get together on this whole fiscal cliff, it might actually help things along.”

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