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Growing imports muddy outlook for beam pricing

Keywords: Tags  steel beams, wide-flange beams, steel, beams, South Korea, West Coast, Gulf Coast, Frank Haflich


LOS ANGELES — An increase in wide-flange beam imports has brought about the reemergence of so-called “foreign-fighter pricing” by domestic mills, complicating any effort to determine what effect a significant rise in benchmark scrap prices has had on steel beam prices.

AMM raised its consumer buying price for automotive shredded scrap in the Chicago market $35 per ton to $412 per ton last week, setting off speculation that beam mills would try to raise published beam prices for April after holding them steady for the past four months (amm.com, March 7). Despite a $9-per-ton cut in shredded Chicago scrap last month, domestic beam producers kept the f.o.b. mill price on most core sizes of wide-flange beams at $780 per ton, or $39 per hundredweight (amm.com, Feb. 15).

Initial indications are that foreign-fighter pricing is most prevalent on the West Coast—possibly followed by the Gulf Coast—mainly because import permit applications from South Korea, the region’s largest offshore source, jumped in the first two months of 2013.

South Korea accounted for about 77 percent of all wide-flange beam import permit applications the U.S. Department of Commerce received in January and February, the department said.

Sources estimated that delivered foreign-fighter prices, when freight charges are excluded, can in some cases amount to a discount of some $60 per ton off mill-published prices. As in the past, it is assumed that such deals include a minimum purchase and must be accepted by a deadline rather than being open-ended.

Meanwhile, market participants are unsure whether or not South Korean imports will recede in March. South Korean wide-flange beam import permit applications reached 5,373 tonnes in the first seven days of this month, or more than 85 percent of the total permit tonnage in that category.

Even without foreign-fighter deals, some market sources question domestic producers’ ability to push through the full amount of the scrap increase, although some of them also believe commercial nonresidential construction could improve as the year progresses.

“The mills have plenty of material on the floor,” a Midwestern distributor said, noting that even relatively comfortable lead times of about four weeks are moot in some cases because this floor stock is available.

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