The US domestic tubing market has hit a soft spot, and market players are not optimistic that there will be a speedy recovery. Demand for tubing is soft or, as one service center put it, "there just is none." The commercial construction market has been weakening slightly, which has slowed down the need for larger sized tubing. The housing construction market, along with other end-use markets, is sluggish, resulting in an ongoing slowdown of demand for mechanical sized tubing. In addition, the flat rolled market has been slow for months now, causing raw material prices for tubing mills to be relatively inexpensive.
For about six weeks now, market sources have been anticipating a dip in tubing prices; however, no official price decrease has been announced by mills. Still, discounting is so prevalent that domestic prices, on average, have softened by approximately $1.00 cwt. ($22 /mt or $20 /nt) in recent weeks. In general, current domestic hollow section prices now range from $39.00 cwt. to $41.00 cwt. ($860 /mt to $904 /mt or $780 /nt to $820 /nt) for A500 grade A and grade B hollow sections up to 6" in the Midwest region. Compared to this time last year, domestic numbers are down by approximately $8.00 cwt. ($154 /mt or $140 /nt). Import bookings are minimal due to the lack of demand in the US.
The main source of tubing imports is China; however, bookings have been very minimal as the Chinese mills have raised their prices in order to make up for the VAT rebate reduction. Chinese offers are too close to domestic offers for buyers who want to deal with the everyday problems that occur when buying imports, such as delivery and quality issues. Chinese import offering prices have not increased this week, but mills are still trying to push for higher prices. Current hollow section offering prices from China still range from $34.50 cwt. to $36.00 cwt. ($761 /mt to $794 /mt or $690 /nt to $720 /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 import offers have remained stable since our last report two weeks ago. However, the pricing trend is up as flat rolled prices are on the rise in Turkey, and it is only a matter of time before Turkish tubing mills push that raw materials cost increase onto customers. Import offers from Turkey are still in the range of $36.50 cwt. to $38.00 cwt. ($805 /mt to $838 /mt or $730 /nt to $760 /nt) FOB, loaded-truck, US Gulf Coast ports.