US tubing mills are looking to announce a price increase over the next couple weeks on the heels of recent scrap and hot rolled coil price upticks, but the success of such an increase in this sluggish market is less than certain.
It looks like the flat rolled price increase announcements are likely to succeed, at least for the short run, but any tubing price increase announcement may have a different result. Many distributors have not seen any improvement in demand and are not expecting to anytime in the near future, so if tubing producers do raise prices it is very likely that spot prices may slide back down in the following months, if they register an increase at all.
Most domestic mills' HSS tubing offers have remained neutral from our last report two weeks ago, mostly ranging from around $34.50 cwt. to $35.50 cwt. ($761/mt to $783/mt or $690/nt to $710/nt) ex-mill. Most spot transactions have also remained neutral. Customers with significant tonnage should still be able to find deals at around $33.00 cwt. ($728/mt or $660/nt) ex-mill in the Midwest.
Meanwhile, offshore HSS tubing offers to the US haven't presented any significant competition to US mills recently. Traders have informed SteelOrbis that even though you may be able to find an offer here or there if you really look for it, it is a moot point since prices are not low enough to make sense and the near future of the market is still cloudy. Offshore import offers might attract a little more interest right now if buyers believed US mills would be able to keep raising prices but that doesn't appear to be the case. Furthermore, tubing offers from Japan and Korea to the US, which were active in the beginning of the fourth quarter, priced themselves out of the market by the beginning of November. And now that hot rolled coil prices are on the rise globally, competitive import offers are not expected to be seen from these offshore sources anytime soon. The weak dollar is also not helping importers.
That leaves Mexico as the primary HSS tubing supplier to the US. Mexican offers have trended fairly neutral over the past two weeks and continue to range from approximately $34.50 cwt. to $36.00 cwt. ($761/mt to $794/mt or $690/nt to $720/nt) delivered to Southern California and at about $32.00 cwt to $33.00 cwt. ($750 /mt to $772/ mt or $680 /nt to $700 /nt) delivered to Houston. However, these ranges, too, could register a slight uptick over the next two weeks.
Preliminary license data from the US Steel Import Monitoring and Analysis System (SIMA) demonstrate that total import tonnage of structural pipe and tube decreased for the fourth consecutive month in November, falling from 15,403 mt (preliminary census data) in October to 14,116 mt. For the third consecutive month, only Canada, at 9,972 mt, and Mexico, at 2,552 mt, exported more than 1,000 mt to the US in November.