LOS ANGELES Structural steel prices have become a moving
target as two of the three major U.S. producers posted their
second reductions in a month.
Gerdau Long Steel North America, in what most market observers
viewed as an uncharacteristic downside leading move, reduced
its published beam prices by $20 per ton effective May 1 due to
increasing levels of competition from both domestic and
foreign producers, the Tampa, Fla.-based producer said in
a letter to customers.
Gerdaus move was quickly followed by the Columbia City,
Ind.-based structural and rail division of Steel Dynamics Inc.
(SDI), which said it would drop published transaction prices on
wide-flange beams and channels by $20 per ton effective May 2.
The cuts by Gerdau and SDI would bring the f.o.b. mill price on
core sizes of wide-flange beams to $765 per ton ($38.25 per
hundredweight), down from a previous level of $785 per ton
($39.25 per cwt).
Meanwhile, Nucor-Yamato Steel Co., Blytheville,
Ark.generally viewed as the industry pricing leader and
usual initiator of published pricing moveshad yet to
announce a change, market sources said.
consumer buying price for shredded
automotive scrap in the Chicago market, a key component of some
mills raw material surcharges, fell by $22 per ton in
April, and early indications are that prices will decline by a
further $20 per tonne in May (
amm.com, May 2
Market sources said they were hard-pressed to recall a time in
recent years when Gerdau was the first to announce a cut in
But they also noted that traditional beam-buying patterns have
been disrupted as distributors, instead of ordering on an
ongoing basis, have held off placing tonnage not only until
monthly scrap updates are posted, but also until they
accumulate a requirement large enough to command discounts that
have lately ranged up to $60 per ton.
Im glad they did it now, one distributor said
of Gerdaus leading move, maintaining that some buyers now
sit on the sidelines for two weeks out of the month as they
wait for beam prices to settle.
SDI told customers in its announcement that it reserves the
right to meet competitive measures by other
millsincluding up-front discounting,
foreign-fighter pricing and back-ended rebateswhich
market sources agreed reflects the wide scope of price-cutting.
While discounting is often attributed to lower-priced imports
into such markets as the West Coast, buyers in other parts of
the country blame it on the failure of domestic beam
consumption to pick up this year, leaving U.S. mills far below
People are sensing that prices are going south and
theyre doing whatever they can to get rid of
higher-priced inventory, a Midwest distributor said of