LOS ANGELES Steel beam imports plunged in December in what many observers see as a seasonal decline as buyers also bide their time before entering large orders with U.S. mills.
Applications for December import permits of wide-flange and standard beams fell 75.4 percent to 8,132 tonnes from 33,002 tonnes in November, according to data from the U.S. Commerce Departments Enforcement and Compliance division.
Market observers said the reduction isnt surprising since service centers often look to end the year with low stocks, both to reduce their tax exposure in some states and show a high inventory turn rate.
Mexico led the way, with import applications for 3,217 tonnes of wide-flange and standard beams, up 27.1 percent from 2,531 tonnes in November. Canada also reported increased volumes, although at much lower tonnage levels, with import applications rising 98 percent to nearly 815 tonnes in December from 411 tonnes a month earlier.
Meanwhile, second-place Luxembourg had import license applications of 1,676 tonnes, down 79.3 percent from 8,060 tonnes in November. South Korea was third, with applications for 1,565 tonnes, down 83.8 percent from 9,645 tonnes in the same comparison.
But market sources said U.S. mills continue to "stick to their guns" on higher published prices that indicate an overall increase of $35 per ton ($1.75 per hundredweight) in posted tags since they began announcing increases in November and December. However, this would mean significantly greater increases in transaction prices, since business was being conducted at discounts estimated at $2 to $3 per cwt to the prices published for much of last year.
"I think people are dragging their feet" before theyll be willing to resume large-scale purchases, one service center buyer said. Like many distributors, he purchased or ordered enough material at earlier, discounted price levels to satisfy his projected requirements through the first 45 to 60 days of this year.
"We may get stuck buying a small amount at the new (published) price, but I dont think anyone is willing yet to reload their inventory at that level," another buyer said.