Spot prices for hollow structural sections (HSS) in the US domestic market have once again adjusted downward, mimicking the downtrend in the US flats market.
Under the continued pressure of a slow construction market (The US Census Bureau reported July 1 that construction spending edged down another 0.6 percent in May), and a still softening US domestic flat-rolled market, domestic HSS prices have come down significantly in the last two weeks. On the US West Coast, tubing mills have attempted to stave off major decreases, but with buyer activity sluggish HSS spot prices ex-West Coast mill have slumped. Since our last report two weeks ago, HSS spot prices have fallen $2.00 cwt. ($44/mt or $40/nt) into the range of $54.00-$55.00 cwt. ($1,190-$1,213/mt or $1,080-$1,100/nt) ex-mill, with most orders being placed on the lower end of the range.
The decline in US Midwest HSS spot prices has been no less dramatic. In the last two weeks, spot prices have dropped $2.00 cwt. as well, and are now in the range of $51.00-$52.00 cwt. ($1,124-$1,146/mt or $1,020-$1,040/nt) ex-mill. However, amid slow activity, SteelOrbis has learned that at least one Midwest mill has been undercutting the market, and offering HSS at spot prices just under $50.00 cwt. ($1,102/mt or $1,000/nt) ex-mill for large tonnage buyers. Nonetheless, HSS spot prices--in the Midwest as well as the West Coast--will likely deteriorate further in July, as domestic hot-rolled coil (HRC) spot prices, currently at $36.00-$37.00 cwt. ($794-$816/mt or $720-$740/nt) ex-Midwest mill, are poised to fall at least another $1.00 cwt. ($20/nt or $22/mt) this month.
On the import side, while arriving imports of structural pipe and tube have increased in June, current futures import booking activity is almost non-existent. As of June 28, 34,359 mt (license data) of structural pipe and tube has arrived into the US, according to US Steel Import Monitoring and Analysis System (SIMA) data. Arriving imports totaled 28,416 mt (preliminary census data) in May and 23,650 mt (census data) in April. Most notably is an increase in imports arriving from Korea. Korean mills exported 9,146 mt of structural pipe and tube to the US in June, and 6,095 mt in May; over the previous 12 months, however, Korean mills have only exported an average of 3,500 mt per month of structural pipe and tube to the US.
As for current Korean import offers to the US, interest is minimal although Korean offers are significantly lower than US domestic spot prices at $46.00-$47.00 cwt. ($1,014-$1,036/mt or $920-$940/nt) DDP loaded truck in US Gulf ports. Turkish mills are also still offering HSS for export to the US, and offer prices are just above Korean prices--both Turkish and Korean prices have shown no change in the last two weeks. South of the border, traders report "surprising steady" import activity for Mexican HSS, still in the range of $53.00-$54.00 cwt. ($1,168-$1,213/mt or $1,060-$1,100/nt) DDP loaded truck in US West Coast ports, and $50.50-$52.50 cwt. ($1,113-$1,157/mt or $1,010-$1,050/nt) DDP loaded truck in US Gulf Coast ports--unchanged in the last two weeks. Continued US-buyer interest in Mexican offers is not only due to slightly lower prices, but speedy delivery. On the West Coast, Mexican mills are touting deliveries to buyers within five to seven days after an order is placed.