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Beam market withstands drop in scrap price

Keywords: Tags  steel beams, beam prices, scrap, scrap prices, shredded scrap, construction, Frank Haflich

LOS ANGELES — Structural steel prices appear to be withstanding the challenge of lower scrap prices, but it’s still far from clear whether the five-and-a-half-year slump in the beam market is over.

Despite a recent $30-per-ton drop in AMM’s consumer buying price for shredded automotive scrap in the Chicago market (, Feb. 7), most market sources said they’ve seen no decline in beam prices. But while published f.o.b. mill prices remain firm, discounts on delivered beams continue to vary widely, depending on the regional market.

The published f.o.b. mill price on core sizes of wide-flange beams is 800 per ton ($40 per hundredweight). However, delivered prices to customers’ warehouses represent discounts ranging from $10 to $20 per ton in some parts of the East and Midwest to $40 per ton or more in import-sensitive regions such as the Gulf Coast and West Coast, once the mills’ willingness to absorb freight costs is taken into account, the sources told AMM.

Meanwhile, as producer lead times move out for some buyers, they aren’t sure how much of this increase is due to growing mill backlogs vs. logistical issues.

"There’s a complete disconnect between our business and what the mills are telling us," one southern distributor said, noting that producers maintain they’re busy while recent demand in the resale market remained slow.

"Generally, lead times have moved out a few weeks, but you can still find a specific size on the mill floor," one service center executive in the East said.

A fabricator source noted that some of his mill rollings have been pushed out by about two weeks, stretching his total deliveries by nearly a month from earlier expectations.

"The biggest issue I have today with the mills is delivery," one Midwest distributor said, citing both the weather and what he sees as a continuing shortage of rail cars.

While there’s an overall sense among some service centers that nonresidential construction—the primary market for beams—is improving, most market sources agree that since demand first slumped in mid-2008 they’ve been burned too many times with a false sense of hope early in the year.

"There’s more optimism this year on the fabricators’ part, but they’re not euphoric," a distribution executive said of his customers.

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