LOS ANGELES Discounting has re-emerged in the structural steel market, with sporadic reports of wide-flange beams being offered below published mill pricing.
Some domestic mills this week made offers at discounts of as much as $30 per ton to list prices, market sources said. But such offers have been limited, and it remains unclear how long the trend will last. However, a number of buyers insist that they have yet to see offers that are below list prices.
"This isnt happening everywhere, and its not from everybody," one buyer said, but acknowledged that he was offered material at delivered prices that would indicate a discount of $30 or more to the published list price.
Most major producers said earlier this month that they would hold the published f.o.b. mill price on wide-flange beams at $780 per ton ($39 per hundredweight) for February, the third month in a row that they would be at that level (amm.com, Jan. 22 and Jan. 11).
This months discounted offer is "isolated and not really a big deal," one buyer said.
"Were being told, Here is our mill number, but if somebody else is better can you give us a second look? " a service center buyer in the Midwest said. However, he noted that he isnt actively pursuing discounts and that his company continues to base its resale price off of the published mill number.
Some buyers remain skeptical of mill suppliers who say that deals arent being made. "They tell us the price at the mill is flat, yet theres pricing in the (resale) market that indicates it isnt," a Midwest distributor added. "You cant sell material today at a normal markup that you bought at $39 (per cwt) plus freight."
Meanwhile, most buyers said they havent seen beam demand rise meaningfully this year.
"Theres been no big change from last year," another Midwest distributor said. Like most of his counterparts, hes pinning his hopes for a near-term price increase on rising scrap tags rather than growing structural steel demand.