Gerdau Long Steel North America has launched the first attempt
by a U.S. mill to boost beam prices in more than six months,
but buyers see a challenge ahead in breaking a five-month
logjam in published and transactional tags.
Gerdau Long Steel
North America told customers late last week it would raise the
transaction price of beams by $20 per ton ($1 per
hundredweight) effective with orders placed Nov. 4. Confirmed
orders made by the close of business Nov. 1 will be
price-protected if shipped by Nov. 15, the Tampa, Fla.-based
hadnt yet heard from the other two major U.S. beam
producers, Blytheville, Ark.-based Nucor-Yamato Steel Co. and
Fort Wayne, Ind.-based Steel Dynamics Inc.s Structural
and Rail division in Columbia City, Ind.
The last price
increase attempt by domestic beam producers came in April,
although prices retreated within a month and until recently
remained flat, both on posted and transactional levels.
Published f.o.b. mill prices on core sizes of wide-flange beams
have remained at $765 per ton ($38.25 per hundredweight) since
May. However, discounts on a delivered basis have ranged from
$2 to $3 per cwt, depending on the size of the buyer and
regional competitive conditions.
announcement is great, but the question is: Whats
the transaction price? " one Midwest distributor
asked, adding that other mills could "drag their feet" before
reacting to Gerdaus move in order to attract hedge
Moreover, some mills
in recent weeks were selling beams at about $1 per cwt below
prevailing discounted levels, market observers said. These
sources speculated that any reduction prior to a price increase
attempt might help clear out surplus mill floor stocks, as well
as fill out rolling schedules through year-end, bolstering
producers ability to stick by an increase.
"A lot depends on
scrap," an eastern service center executive said, citing recent
signs of stabilization in the raw material. "If scrap goes up
only $10 a ton, then it will be difficult to put through an
increase. But if it rises $30 a ton, chances will be a lot
better (for an increase)."
permit applications for October totaled 11,958 tonnes through
Oct. 31, down 49.8 percent from 23,806 tonnes in September,
according to the U.S. Commerce Departments Enforcement
Standard beam imports
fell 60.3 percent to 4,182 tonnes in October, led by a nearly
79-percent drop in imports from Russia to 1,364 tonnes from
6,487 tonnes and an 11.6-percent fall in arrivals from
Luxembourg to 2,071 tonnes from 2,343 tonnes.
imports fell 41.4 percent to 7,775 tonnes in October, led by a
25.6-percent drop in material from South Korea to 4,284 tonnes
from 5,759 tonnes in September.