LOS ANGELES Structural
steel prices are expected to remain steady through year-end as
buyers look for the market to improve in 2013.
buying price for shredded automotive scrap in the Chicago
market remained at $386 per ton this week, dampening
speculation that wide-flange beam tags might weaken through the
end of the year.
Previously, buyers thought that
any significant fallback in the Chicago scrap
benchmarkthe primary component of some mills raw
material surchargesafter it rose $52 per ton in November
could prompt mills to shave beam prices, which increased by $35
per ton for December.
with that," said a source at a West Coast distributor, echoing
the view of other buyers who now say prices will remain stable
through the end of 2012.
Before AMM held Chicago
shredded flat, most betting was that if scrap declined by $20
per ton or less, producers were likely to hold to their current
published f.o.b. mill price of $780 per ton ($39 per
hundredweight) on most core beam sizes. But a greater decline
would have pressured them to cut prices to avoid discounting,
closing out the year on an unstable note, buyers said.
"I was much more concerned with
the possibility of a potential downdraft in scrap than with a
rise," said an eastern service center buyer.
Shipments from producers
floor stocks through November at the old price of $745 per ton
($37.25 per cwt) have ended, and the overwhelming majority of
beams are now leaving mills at the new published price, sources
Most buyers are now placing
their hopes for the end of a "spotty" market and recovery in
beam demand on a pickup in nonresidential construction, which
has lagged since the economic recession began in 2008. Domestic
beam consumption is expected to rise only marginally to 4
million to 4.1 million tons this year from a little over 3.9
million tons in 2011, with most of the increase occurring in
the first half of this year, according to a source.
However, while service centers
appear to remain cautious, both the residential construction
and automaking sectors have been showing signs of life, with
hope that it could spread to the nonresidential sector.
Scattered signs have been reported that contractors and
fabricators are likely to begin quoting large nonresidential
projects in the new year, especially if Washington lawmakers
can avoid going over the fiscal cliff without any lasting
"We think theres a lot of
pent-up demand on the construction side," a market observer