LOS ANGELES Nucor-Yamato Steel Co. and Nucor Corp.s Berkeley, S.C., mill cut their published transaction prices on beam products by $20 per ton ($1 per hundredweight) effective May 2, making the reduction virtually universal among domestic mills. Both mills attributed their moves to "market conditions."
The price cuts follow similar moves by Tampa, Fla.-based Gerdau Long Steel North America and the Columbia City, Ind.-based structural and rail division of Steel Dynamics Inc (amm.com, May 2). They establish a new published f.o.b. mill price on core wide-flange beam sizes of $765 per ton ($38.25 per cwt), down from $785 per ton ($39.25 per cwt) previously.
Moreover, both Blytheville, Ark.-based Nucor-Yamato and Nucor Berkeley, a division of Charlotte, N.C.-based Nucor, insisted in similarly worded letters that they would not cut prices further in May. Prices have dropped $40 per ton on a published basis in less than a month.
The two mills said in their letters that their new posted prices will be good for the month regardless of any change in the raw material surcharge, which will be announced no later than the third Monday in May. Both mills typically announce their published transaction tags for the following month at that time, meaning this past weeks move to change prices before scrap settles is a break from recent pricing patterns (amm.com, May 3).
Buyers generally accepted the reasons for the price cut, noting that a continuing decline in scrap tags made them leery about placing tons at the mills at list prices likely to be out of date within days. "If a decrease is imminent, its better to not freeze the market (by not changing prices)," one service center executive said.
The main question in the minds of most buyers now is whether these moves will narrow the gap between published tags and widespread discounted pricesreported at $60 per ton or more under the previous published level on a delivered basisor will instead push actual transaction prices down even further. Most market sources said that they believe the former is more likely, barring any future substantial drop in scrap prices.