Prices for domestic
tubing have been on a decline for the past couple months and fell slightly again just in the last two weeks. Market players believe, however, that the
tubing market is close to bottoming out and will rebound by the end of Q1.
The domestic hollow sections market had its share of highs and lows throughout 2006, but so far in the New Year, we have seen more “lows” than “highs” where price is concerned. Since January 1st,
tubing prices have fallen approximately $5.00 cwt. ($110 /mt or $100 /nt) and may even fall another notch before rebounding. The reason for this drop in price has been a combination of the depreciating domestic flat rolled market and the current supply and demand situation. Although service centers are not at the “inventory reduction mode” level they were at in November and December, inventories are healthy, in fact, too healthy compared to the current amount of demand.
Thanks to the industrial and non-residential
construction markets, demand for structural
tubing is decent, however, it is not as strong as it was expected to be at this time of the year. Market sources say that demand is currently stable, at best. California, a strong market throughout 2006, has also slowed some.
Although domestic
tubing prices have fallen another $1.00 ($22 /mt or $20 /nt) since last week, market players believe there is a light at the end of the tunnel. SteelOrbis has heard that
tubing prices are expected to rebound by approximately $40 /nt ($2.00 cwt. or $44 /mt) by March or April. Along with the price increase, demand is expected to be much stronger come spring.
Currently, domestic hollow section prices are now in the range of $38.00 cwt. to $40.00 cwt. ($838 /mt to $882 /mt or $760 /nt to $800 /nt) for A500 grade A and grade B hollow sections up to 6” in the Midwest region. Delivered prices to the West Coast are now in the range of $41.00 cwt. to $42.00 cwt. ($904 /mt to $926 /mt or $820 /nt to $840 /nt). There is also a good possibility that these prices will slide slightly before rebounding. Therefore, the domestic pricing trend slightly down.
In
China and
Turkey, flat rolled prices have been on the rise lately. Turkish flat rolled prices in particular have been climbing up, causing
tubing mills to up their prices. Since our last report two weeks ago, Turkish hollow section prices have increased by $1.00 cwt. This increase in price has not been widely accepted in the market and has caused import bookings from
Turkey to be on the low side. With Chinese mills offering the same product at a lower price, Turkish mills cannot compete in the competitive Houston or West Coast markets right now. Turkish mills find more acceptance in the East Coast and Great Lakes regions.
Hollow sections offers from
Turkey are now ranging from $33.50 cwt. to $35.00 cwt. ($739 /mt to $772 /mt or $670 /nt to $700 /nt) for FOB, loaded truck, US Gulf Coast ports.
China is experiencing rising local flat rolled prices, and mills have passed that increase on to hollow sections, upping prices by $0.50 cwt. ($11 /mt or $10 /nt). Chinese offers now range from $30.50 cwt to $32.00 cwt. ($672 /mt to $705 /mt or $610 /nt to $640 /nt) FOB West Coast, approximately $0.50 cwt. (11 /mt or $10 /nt) higher than on the Gulf Coast. East Coast discharge is approximately another $0.50 cwt. ($11 /mt or $10 nt) higher than the Gulf Coast.