As SteelOrbis predicted in its last tubing analysis, US domestic tubing producers announced a price hike of $60 /nt for all new orders effective August 6, 2008 for customers; however in certain US regions, tonnage can still be purchased at the previous numbers.
Including the recent increase, domestic hollow structural sections (HSS) list prices are now in the range of $75.00 cwt. to $76.00 cwt. ($1,653 /mt to $1,676 /mt or $1,500 /nt to $1,520 /nt) for A500 grade A and grade B hollow sections up to 6" in the Midwest regions. However, despite the increase made by mills, customers in the Gulf and Midwest regions are saying deals can be made and customers can easily purchase HSS at the old numbers, or possibly slightly lower.
A Southeast Gulf buyer told SteelOrbis that for the right inquiry, you can find HSS for $71.00 cwt. ($1,565 /mt or $1,420 /nt) in the current market. Demand has softened over the past couple of months and as a result mills are seeing a slowdown in business. Mills are having trouble filling their order books and availability is plentiful, so in order to not lose market share, mills have been making deals with customers, lowering their numbers on a case-by-case basis.
Mills cited rising raw material costs to explain the $60 /nt ($3.00 cwt. or $66 /mt) increase for HSS products, but with demand faltering and business slowing, the increase doesn't seem to be gaining much acceptance. The word is out that lower-priced steel tube can be found, so customers are not willing to pay the list price.
West Coast buyers seem to have a different take on the current situation, however. According to a California tubing buyer, the newest price increase has gone through and it's "wishful thinking" to say the prices are starting on a down trend. In fact, another increase is in the works for early October, according to the buyer, one that will also be accepted in the market.
It's quite possible that the price softening seen in the Southeast Gulf is just a regional slowdown, although, it will, most likely, eventually be seen on a national level as well.
Offshore prices have dropped significantly and although there is not much interest from US buyers right now, as import prices continue to trend down, they may find some takers.
SteelOrbis has learned that due to decreasing flat rolled prices in Turkey, Turkish mills have lowered their tubing offers by another $2.00 cwt. ($44 /mt or $40 /nt) and are now offering HSS to US buyers in the range of $66.00 cwt. to $68.00 cwt. ($1,455 /mt to $1,499 /mt or $1,320 /nt to $1,360 /nt) FOB loaded truck in Houston. Deliveries are for late fourth quarter.