The recent chatter in the market suggests that major tubing mills may not wait until the flat rolled increase kicks in come October, but instead may up prices midway through September. This could just be a rumor as nothing has been confirmed as of yet directly from the mills; nevertheless, market sources have commented, "It's a very strong rumor." If it turns out to be fact, any increase attempt made by the mills may not stick, however, as the hollow sections market is still a little soft.
Though demand has not improved much lately, there is hope for a stronger fourth quarter. With flat rolled prices climbing up slightly in October and the most recent import scare still on buyers' minds, the domestic market may see a brighter future. It is debatable, though, how quickly this will take effect. While some sources point at the fourth quarter, others say that more realistically things will not start to pick up until the first quarter of next year. As of right now there is not excessive demand for hollow sections, so unless demand strengthens, raw material increases and fewer imports will not help all that much.
Currently, domestic prices are still ranging from $38.00 cwt. to $39.00 cwt. ($837 /mt to $860 /mt or $760 /nt to $780 /nt) for A500 grade A and grade B hollow sections up to 6" in the Midwest region. However, there is some debate as to what will happen in the next few days. Sources have commented though, that if there is not an increase within the next few days, tubing mills will most likely wait to see if the flat rolled increase holds firm, and if it is accepted in the market, then they will make their move to up prices for hollow sections.
Another factor which could strongly affect the domestic tubing market is the current issues with Chinese tubing. Traders have confirmed to SteelOrbis that test results have in fact been poor for tubing. Most tests done at the mills did not comply with A500 Grade B standards and some did not comply with Grade A either. Service centers have commented that their customers will not buy material from them if it is of Chinese origin and some fabricators have gone as far as to reject all foreign material. This scare is also affecting other steel products, not just hollow sections. All of this panic is creating bad publicity for import material, but may help the US domestic market to rebound. If imports continue to dry up, domestic mills may begin to fill up, where as now they are fighting for orders.
Although there are no sales of Chinese hollow sections, offers still exist and are ranging from $35.00 cwt. to $36.50 cwt. ($772 /mt to $805 /mt or $700 /nt to $730 /nt) FOB West Coast, and approximately $0.50 cwt. ($11 /mt or $10 /nt) higher on the Gulf Coast. East Coast discharge is roughly another $0.50 cwt. ($11 /mt or $10 nt) higher than on the Gulf Coast.
Turkish hollow section offers are very close to domestic numbers; however, for sizes that cannot be found elsewhere, these offers may look attractive to buyers. Turkish offers are ranging from $37.00 cwt. to $38.50 cwt. ($816 /mt to $849 /mt or $740 /nt to $770 /nt) FOB, loaded-truck, US Gulf Coast ports.