LOS ANGELES Pressure is
building on structural steel mills to lower the published price
of wide-flange beams in the wake of what normally might not be
a large enough fall in a key scrap benchmark to trigger a cut,
market sources said this past week.
Talk of lower beam prices comes
on the heels of AMM reducing its consumer buying price
for shredded automotive scrap in Chicagooften used in
mills raw material surchargesby $9 per ton to $377
per ton (
amm.com, Feb. 7).
While a scrap price decline of
$10 per ton or less traditionally hasnt resulted in a
change in published beam tags, that could be different this
time around, sources said, noting that the drop comes at a time
when an expected January pickup in orders has failed to
materialize, with few indicators that an upturn is
"If we had a spike in demand,
inventories would have been seen as way too low and people
would be scrambling for material," one market source said. "But
that spike hasnt happened."
Major U.S. beam producers have
kept the published f.o.b. mill price for core beam sizes at
$780 per ton ($39 per hundredweight) for three months, and some
buyers say they are starting to wonder if thats still a
fair reflection of the market.
"Weve been sitting on that
$39 (per cwt) number too long," one Midwest service center
buyer said, emphasizing that he isnt rooting for a price
cut. "Theres too much pressure (on prices) and too much
Since the second half of last
year, domestic beam producers have appeared determined to
eliminate discounts and publish price lists that more
accurately mirror market conditions. But reports of spot
discounts from some suppliers have re-emerged in recent
"It wouldnt surprise me if
the mills went down $10 per ton," a Northeast service center
buyer said, apparently resigned to the likelihood of a decline
despite his preference that prices remain steady. "It would
reflect the market."
At the same time, although
arrivals of both South Korean and Spanish beams appeared to
have risen substantially in January from the previous month (
amm.com, Feb. 6), some buyers still dont
believe imports on their own have regained enough momentum
nationally to force a domestic price cut.