US tubing market – Domestics stable, imports rising

Although domestic hollow section prices have not rebounded from their fall yet, for the first time in several months, prices have remained stable, and no further decreases are expected. It looks like the domestic tubing market has finally bottomed out and can now begin its new stage of recovery. Since January 1st, 2007, domestic tubing prices have fallen approximately $5.00 cwt. ($110 /mt or $100 /nt), mainly due to the depreciating flat rolled market. Now, the flat rolled market in the US is bouncing back and prices have been going up some. The recent upturn in the flat rolled market will have a positive impact on the hollow sections market in the weeks to come. There are still quite a few signs of weakness in the market, however. Domestic tube makers are looking for business, and demand is relatively soft, especially for the ornamental sizes. But with the industrial and non-residential construction markets maintaining their strength and flat rolled prices on the rise, there is hope that hollow section prices will increase before the end of the first quarter. Currently, domestic hollow section prices are still 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). The domestic pricing trend is now neutral but is expected to creep up by March or April, when tubing prices are expected to rebound by approximately $40 /nt ($2.00 cwt. or $44 /mt). Current service center inventory levels are healthy, perhaps a little too healthy for the current demand. Once the snow and ice throughout the country begins to melt and spring arrives, demand is expected to pick up also. As domestic prices remain stable, import prices continue to increase. Flat rolled prices in Turkey are skyrocketing, causing tubing mills to up their prices once again.We reported two weeks ago that Turkey increased their tubing offers by $1.00 cwt. ($22 /mt or $20 /nt) and have now confirmed that since then, they have upped their prices by another $1.50 cwt. ($33 /mt or $30 /nt). These offers are on the high side and have not been widely accepted in the market, causing import bookings from Turkey to remain light. Hollow sections offers from Turkey are now ranging from $35.00 cwt. to $36.50 cwt. ($772 /mt to $805 /mt or $700 /nt to $730 /nt) for FOB, loaded truck, US Gulf Coast ports. The Gulf Coast market, however, is highly-saturated with lower-priced products from China, and Turkish mills have been finding more acceptance on the East Coast and Great Lake regions. Chinese hollow section prices, though lower than Turkish offers, have also continued to increase. China is still experiencing strong local flat rolled prices and mills have passed those increases on to hollow sections, upping prices again, by $0.50 cwt. ($11 /mt or $10 /nt). Chinese offers now range from $31.00 cwt to $32.50 cwt. ($683 /mt to $717 /mt or $620 /nt to $650 /nt) FOB West Coast, approximately $0.50 cwt. (11 /mt or $10 /nt) higher on the Gulf Coast. East Coast discharge is approximately another $0.50 cwt. ($11 /mt or $10 nt) higher than the Gulf Coast. According to census data released by the United States Import Administration, during the month of January 2007, worldwide structural pipe and tube imports to the US totaled 56.0 thousand mt, coming in at above the 2006 monthly average of 53.3 thousand mt.