Another failed attempt to raise hollow structural sections (HSS) spot prices has resulted in increased pessimism in the US domestic market.
About a week ago, Atlas Tube sent a letter to customers increasing HSS prices by $2.00 cwt. ($44/mt or $40/nt) with all new orders (orders currently on the books were to be price protected for shipments through October 22, 2011), followed by a similar increase from Leavitt Tube. However, no other mills had followed the increase as they did for the August-announced $3.00 cwt. ($66/mt or $60/nt) increase. As it quickly became evident that the increase had no chance of sticking (and no other mills were planning to follow Atlas' lead), Atlas informed customers a few days later that it was rescinding the increase.
While the fact that Atlas rescinded the increase came as little surprise to HSS buyers, who did not believe that the increase was feasible anyhow, it has increased concerns that spot prices may actually begin to fall once again after a few short-lived weeks of stabilization. The rescission "took credibility away from the current prices," according to one Southeast distributor. HSS spot market prices, still $48.00-$50.00 cwt. ($1,058-$1,102/mt or $960-$1,000/nt) ex-Midwest mill, as they were two weeks ago, are hanging on by a thread. With US domestic hot rolled coil (HRC) spot prices beginning to soften again after a six week uptrend, a decline in HSS spot prices may be looming not too far down the road as well.
Given the heightened uncertainty in the US domestic HSS market, it comes as no surprise that import interest has quieted after a brief increase in inquiries (and bookings) two weeks ago. And if US domestic tubing spot prices do fall again, it will quickly dampen any remaining import interest in Korean HSS, currently in the range of $44.00-$45.00 cwt. ($970-$992/mt or $880-$900/nt) DDP loaded truck in US Gulf ports. Turkish prices, meanwhile, are higher at $45.00-$46.00 cwt. ($992-$1,014/mt or $900-$920/nt) DDP loaded truck in US Gulf ports.