Following the old adage "what goes down must go back up", US domestic tubing mills have decided to follow flats producers, announcing a $2.00 cwt. ($44/mt or $40/nt) increase on hollow structural section (HSS) tubing products effective immediately.
The recent turnabout may be a surprise to some, especially considering that just two weeks ago concerns about HSS dropping to sub-$40.00 cwt. ($882/mt or $800/nt) was a very real concern for service centers, who at the time were evaluating the validity of rumors that hot rolled coil (HRC) could tick down as low as $25.00 cwt. ($551/mt or $500/nt) before bottoming out.
Now, however, the average transaction pricing for HSS has experienced a $1.00 cwt. ($22/mt or $20/nt) uptick since our last report two weeks ago, with tubing mills now making a strong push for spot price ranges between $42.50-$43.50 cwt. ($937-$959/mt or $850-$870/nt), ex-Midwest mill. While this still reflects only half of what is being "officially" asked for, many buyers are indicating that they feel this is a strong step in a positive direction. Questions as to whether the full increase will be realized any time soon, however, continue to linger.
The reason for this is simple: although pricing is heading in a more favorable direction, this is not indicative of increased order activity, which, according to several Midwest service centers, still remains much lighter than they're comfortable with. And because of this, several purchasing managers have expressed a strong belief that should someone approach tubing mills with an order for significant tonnage, current pricing could easily become negotiable.
Looking West, spot offers (for now at least) have trended sideways since our last report two weeks ago and continue to be seen at about $46.00-$47.00 cwt. ($1,014-$1,036/nt or $920-$940/nt). West coast mills, however, are expected to roll out similar transaction price increases within the next week or so.
For now, the forecast has been changed from slightly downward to slightly upward, as it's still a little too soon to tell whether increases for HRC will continue to trend sideways, upward, or slip back down in the upcoming weeks.
Looking offshore, overseas offers have once again reemerged, with Turkish HSS being seen offered duty-paid FOB loaded truck US Gulf Ports in the approximate range of $43.00-$44.00 cwt. ($948-$970/mt or $860-$880/nt). While there are rumors about Korea having returned to the market, solid offer prices have yet to be reported. But as previously stated, considering that the time frame for delivery of product purchased today is well into the mid- to late-fourth quarter, interest in overseas offerings will likely remain scant.
