As flat rolled mills continue with their upward price momentum, tube producers are bracing their customers for another large increase.
Following a huge leap in busheling scrap prices earlier this month, domestic flat rolled mills have made some decent-sized leaps as well. Flat rolled mills have been upping their prices drastically since the beginning of this year, and this month is no different. Flat rolled prices have climbed up approximately $3.00 cwt. ($66 /mt or $60 /nt) in May, which will again significantly increase tubing mills' raw materials costs, forcing them to increase their prices as well.
Tubing mills have yet to announce another increase, but mills have confirmed that one is coming, possibly as early as the beginning of next week. The expectation among domestic tube buyers is that the increase will be anywhere between $4.00 cwt. to $6.00 cwt. ($88 /mt to $132 /mt or $80 /nt to $120 /nt) this time around. Buyers are speculating that by the end of the summer, prices will be up another $10.00 cwt. ($220 /mt or $200 /nt) from where they reside now, though they may finally peak at that level.
Currently, domestic tubing prices range from $68.00 cwt. to $69.00 cwt. ($1,499 /mt to $1,521 /mt or $1,360 /nt to $1,380 /nt) for A500 grade A and grade B hollow sections up to 6" in the Midwest regions, although by next week prices will be up significantly for all new orders.
The imminent domestic increase, along with the previous increases are said to be strictly raw materials-driven. Demand is decent but less than stellar. There is, however, a slight seasonal up-tick, but it is hardly noticeable.
Import offers are surfacing more, with more countries offering at attractive numbers. Whereas a couple months ago, import offers were either non-existent or completely unreasonable, now we are beginning to see more eye-catching numbers. Some buyers are jumping on the opportunity to purchase lower-priced steel, though others are not willing to make the risky move, believing that domestic numbers will peak and fall before the shipments arrive.
Offers from South Korea have surfaced, ranging from $63.00 cwt. to $64.00 cwt. ($1,389 /mt to $1,411 /mt or $1,260 /nt to $1,280 /nt) FOB, loaded truck, US Gulf ports.
Mexican offers are also available, but only for mechanical-sized tubing, ranging from $58.00 cwt. to $59.00 cwt. ($1,279 /mt to $1,301 /mt or $1,160 /nt to $1,180 /nt) Gulf Coast.
Turkish offerings to the Gulf Coast are still pricing out at $63.00 cwt. to $64.00 cwt. ($1,389 /mt to $1,411 /mt or $1,260 /nt to $1,280 /nt) FOB, loaded truck, US Gulf ports. These offerings are for heavy wall A500 Grade B material that has not been affected by the antidumping determination.
In other import news, the US International Trade Commission (ITC) determined on Wednesday that imports of light-walled rectangular pipe and tube from Turkey have injured the US steel industry. This decision follows the Department of Commerce's (DOC) determination that Turkish producers made sales to the US at below normal market value. As a result of this determination, the DOC will issue an antidumping order on imports of LWR pipe and tube from Turkey for less than 4 mm (0.1575"). This means all imports from Turkey will cease to exist until mills go for antidumping reviews or the cases are revoked in five years at a sunset review.