Chatter regarding the current steel hollow sections situation has been tying up phone lines and clogging up inboxes for people in the steel community. The main topic of concern - Chinese tubing is arriving at ports and is just sitting there, as buyers refuse to take deliveries.
The situation started when some structural tubes on the West Coast were found to have defective welds. The quantities of these defective tubes were not great; however, they sufficed to ignite a wild fire. Other problems have reportedly surfaced; for instance, the grade and tensile requirements were allegedly not met when the buyers tested the products.
Of course, all the recent negative publicity concerning tubes of overseas origin hasn't helped either. Tube end-users and steel service centers are extremely nervous about quality issues, even though Chinese hollow sections have been steadily entering the US for more than three years. Now they are asking traders to test the goods before they accept deliveries. In the meantime, this material is clogging up ports and temporary warehouses.
With a soft market in the US, domestic prices are pretty close to import levels. Buyers can easily switch their requirements to domestic origin and not worry about the quality consequences. The domestic steel and tube industry is quick to capitalize on the fears of the buyers and has been looking for defective tube imports, fueling the turmoil to an elevated level.
Needless to say, not all Chinese products have the same quality. There are hundreds of square and rectangular tubing mills in China that are exporting to the US market and some of them have excellent quality. Buyers are urged to do their research and due diligence before refusing or canceling any orders.