Spot prices in the US domestic tubing market are trending upward as increase announcements from Midwest mills are driving prices higher once again.
As expected, tubing mills in the South and Midwest have matched Atlas Tube's $2.00 cwt. ($44/mt or $40/nt) price increase (announced December 20), including Southland Tube, which waited until January 2 to issue their increase due to a few openings in January order books. For the most part however, few, if any, January rollings are still available as most mills are already closed for January production.
HSS increase announcements continue to respond to the rapidly increasing cost of hot rolled coil (HRC), which experienced yet another price hike in the final week of 2010-this time for $1.50 cwt. ($33/mt or $30/nt) from the Nucor Sheet Mill Group. As a result, another increase announcement for HSS could happen as soon as this week, although tubing mills have not exactly mirrored each move flat-rolled mills have made recently, opting to wait until announced flat-rolled increases are accepted into the marketplace before raising prices themselves. "There's a little more wiggle room in the HSS market" one Southern distributor told SteelOrbis. "Tubing prices didn't plummet when HRC prices were bottoming in October and early November, so there's no reason to think they'll follow every step HRC producers make now."
The $40/nt HSS price increase announcements made by US domestic mills over the past couple weeks continue to push spot prices higher; however, the full $40/nt increase has not taken effect just yet, likely due to a general slowdown in both production and order activity during the holiday season in the final weeks of 2010. HSS spot prices ex-Midwest mill are up $1.00 cwt. ($22/mt or $20/nt) on the low end, and $2.00 cwt. ($44/mt or $40/nt) on the high end since our last report two weeks ago, moving into the range of $47.00-$50.00 cwt. ($1,036-$1,102/mt or $940-$1,000/nt). Nonetheless, a few select deals for larger tonnage buyers just under $47.00 cwt. have been reported, further indicating that the recently announced increases are not sticking quite as quickly as the previous two.
Due to the planned outages that were scheduled at a number of West Coast tubing mills for the latter half of December, HSS spot prices on the West Coast have not yet had enough time to react to Midwest increases, and remain in the $50.00-$51.00 cwt. ($1,102-$1,124/mt or $1,000-$1,020/nt) ex-mill range, with the expectation that West Coast producers will issue their own $40/nt increase announcements in the next one-to-two weeks.
Looking offshore, import tubing offers from Turkey remain competitive, as Turkish mills are reportedly offering HSS to the US in the range of $42.00-$44.00 cwt. ($926-$970/mt or $840-$880/nt) duty paid FOB loaded truck in US Gulf ports. On the imports from inventory side, preliminary license data from the US Steel Import Monitoring and Analysis System (SIMA) demonstrate that total import tonnage of structural pipe and tube increased 3.4 percent from November to December after falling 32 percent in November over October levels. Imports from Korea experienced the most significant month-over-month increase, surging 74 percent from imports of 543.2 mt in November to 2,131 mt in December.
