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Domestic steel beam discounts narrow

Keywords: Tags  steel, beams, nucor-yamato, gerdau long steel, imports, ABI, AIA, Frank Haflich

LOS ANGELES — Discounting has continued in the steel beam market, although the gap between actual and published prices has narrowed as $20-per-ton price cuts announced earlier in May haven’t been accompanied by corresponding lower prices on discounted large orders.

While price-cutting on beams that emerged earlier this year has continued, market sources said the discount hasn’t moved down along with the published price, leaving estimated delivered prices on larger orders at levels similar to a month ago in the neighborhood of $720 to $725 per ton ($36 to $36.25 per hundredweight) f.o.b. mill.

"The decline didn’t move our actual prices down; the mills just closed the gap" between the published price and market price, said a Gulf Coast distributor source.

This past week, Nucor-Yamato Steel Co., Blytheville, Ark., reduced its raw material surcharge by $22 per ton but increased its base price by the same amount, leaving its published transaction price unchanged. This maintained Nucor’s previous $20-per-ton reduction in its published price, when it followed a similar cut by Tampa, Fla.-based Gerdau Long Steel North America that was joined by the rest of the domestic industry (, May 3).

The previous reductions brought the published price on core sizes of wide-flange beams down to $765 per ton ($38.25 per cwt) f.o.b. mill.

While market sources said producers in some cases have attempted to eliminate or greatly reduce discounts, a continuing decline in distributor resale prices has kept the pressure on mills to continue the deals, although many day-to-day purchases are being done at book price.

Meanwhile, May’s import license applications for beams maintained 2013’s strong pace. Applications for both wide-flange and standard beam imports totaled about 23,343 tonnes though May 21 compared with 26,973 tonnes for all of April, according to data from the Commerce Department’s Import Administration.

The United Arab Emirates had filed license applications for 5,513 tonnes of wide-flange beams as of May 21 after being absent for the first four months of the year. Details about the material couldn’t be learned.

Applications for wide-flange imports from South Korea—the largest country of origin in the first four months of the year—totaled 4,344 tonnes through May 21 compared with 11,105 tonnes in April and a peak of 20,068 tonnes in January.

There have been few signs of a broad recovery in nonresidential building that some analysts had previously predicted for the second half of 2013, judging by the Architecture Billings Index (ABI), a leading indicator of construction activity.

The ABI reversed course in April after moving up for most of the past year, falling to 48.6—its lowest mark since July 2012—from 51.9 in March, according to the American Institute of Architects. A score above 50 reflects an increase in billings.

Delays in project approvals, in addition to difficulty in obtaining financing, were blamed for much of the downturn, although project inquiries "continue to be strong," the AIA said.

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