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Beam buyers brace for possible price cuts

Keywords: Tags  steel, wide-flange beams, beam prices, beam reductions, beam imports, Frank Haflich

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 Chicago—often used in mills’ raw material surcharges—by $9 per ton to $377 per ton (, Feb. 7).

While a scrap price decline of $10 per ton or less traditionally hasn’t 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 imminent.

"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 hasn’t 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 that’s still a fair reflection of the market.

"We’ve been sitting on that $39 (per cwt) number too long," one Midwest service center buyer said, emphasizing that he isn’t rooting for a price cut. "There’s too much pressure (on prices) and too much inventory around."

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 weeks.

"It wouldn’t 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 (, Feb. 6), some buyers still don’t believe imports on their own have regained enough momentum nationally to force a domestic price cut.

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