US domestic hollow structural sections (HSS) mill have tried to keep spot prices in line will multiple rounds of price increases but initial signs of weakness have crept into the market. Although many often see a demand pickup in September, service center sources tell SteelOrbis that demand has remained only stable, and there is some skepticism as to whether much will change over the next few weeks. As a result, larger fabrication projects or orders are garnering a discount from mills. In general, official asking prices are in the $48.00-$49.00 cwt. ($1,058-$1,080/mt or $960-$980/nt) ex-Midwest mill range, but higher-volume orders are garnering discounts of as much as $1.00 cwt. ($22/mt or $20/nt) ex-Midwest mill. As a result, the spot price range remains at $47.00-$49.00 cwt. ($1,036-$1,080/mt or $940-$980/nt) ex-Midwest mill, as it was two weeks ago. Service center buyers, on the other hand, are keeping inventories as lean as possible and aren't willing to take the gamble on stock replenishment.
While demand for HSS has been steady, it is unlikely to withstand downward pressure from the flat rolled market. For now, domestic hot rolled coil (HRC) spot prices are steady, but rumblings of growing price weakness in the market have grown louder over the past week, making HSS buyers increasingly cautious. That caution extends to imports as well, and not many are willing to commit to the minimum tonnages often required with futures purchases. In the beginning of August, Korean mills offered HSS to the US at the very competitive price level of $36.00-$36.50 cwt. ($794-$805/mt or $720-$730/nt) DDP loaded truck in US Gulf ports for only a short window of time. Since then, prices have increased $1.00-$2.00 cwt. ($22-$44/mt or $20-$40/nt) and remain well below US domestic spots. Prices, therefore, are not the issue, and traders cite year-end arrivals as the main hindrance to futures.