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Time may be up on firmer structural prices

Keywords: Tags  steel beams, beam prices, price increase, Gerdau Long Steel North America, Steel Dynamics, SDI, Nucor-Yamato Steel, Frank Haflich

LOS ANGELES — Expectations that structural steel prices will firm before year-end are now fading as even a still-awaited wide-flange beam increase by a key player might not be enough to boost the market for December shipments.

Until recently, most buyers saw all the signs pointing to an increase. Gerdau Long Steel North America, Tampa, Fla., and Fort Wayne, Ind.-based Steel Dynamics Inc.’s (SDI’s) Structural and Rail division in Columbia City, Ind., raised prices $20 per ton effective Nov. 4 and Nov. 5, respectively. Also, AMM’s consumer buying price for shredded automotive scrap in the Chicago market rose $31 per ton earlier this month amid anticipation that scrap could continue to gain ground (, Nov. 7).

All that was needed, most observers agreed, was for Nucor-Yamato Steel Co. to make the hike unanimous among major domestic producers. But the Blytheville, Ark.-based producer hadn’t acted by Nov. 20, and buyers said they still weren’t paying more for beams since Gerdau and SDI posted their increases.

Even if Nucor-Yamato announces an increase soon, several service centers have already ordered the bulk of their requirements through year-end at prices heavily discounted to both Gerdau’s and SDI’s new posted f.o.b. mill price of $785 per ton ($39.25 per hundredweight) for core sizes of wide-flange beams and to a previous posted price of $38.25 per cwt.

"We have all that we need through the end of the year," one Midwest service center buyer said. "We’re going to be buying hand to mouth through next month."

Another Midwest buyer noted that he had previously "expected beams to follow suit" as higher prices take hold on other long products such as reinforcing bars and merchant bars, but now looks for no beam increase through year-end.

And indications this week are that scrap prices, instead of continuing to climb, will now trend sideways at best in December (, Nov. 20), making beam buyers increasingly cautious.

"We’re on the fence, again," one distribution executive said about his company’s beam procurement plans.

Moreover, available mill time in December is shrinking. Gerdau notified customers this week that its Petersburg, Va., mill has closed rollings for December, with January rollings "closing quickly," market sources said. December rollings at its Midlothian, Texas, mill are also likely to close soon.

Gerdau told AMM that the Midlothian mill has a scheduled routine outage from early December to mid-month. While "no planned outage" is slated for Petersburg, it confirmed "the shortened rolling cycle, which is designed to best meet the needs of our customers."

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