Spot prices in the domestic tubing market are up significantly since our last report two weeks ago as recent price hikes from mills were quickly accepted by domestic buyers.
Late last week both Atlas Tube and Southland Tube, as well as a number of other Midwest mills, issued $3.00 cwt. ($66/mt or $60/nt) price increases on certain HSS products effective immediately, which instantaneously affected spot prices in the domestic market. Price increases in the tubing market were the expected reaction to the approximate $4.00 cwt. ($88/mt or $80/nt) worth of mill increases in hot rolled coil (HRC) announced last week which cited "rising raw materials costs." And the price of scrap, which is up about $40/lt this month due to shorter winter supply and increased demand, is expected to increase further at least through next month.
"Mills are getting what they're asking for" said one distributor in the Southeast, commenting on the recent uptick in domestic HSS prices. Spot prices in the HSS market ex-Midwest mill are now $46.00-$48.00 cwt. ($1,014-$1,058/mt or $920-$960/nt), a $3.00 cwt. upsurge over previously reported levels two weeks ago, and even buyers with significant tonnages are having a hard time negotiating deals below the lowest end of the range. For now, it appears "all mills are on board" with staying firm with the increases, and prices should remain firm for much of Q1 2011.
HSS bookings ex-West Coast mill are up $2.00 cwt. ($44/mt or $40/nt), and the most commonly reported transaction ranges are now $47.00-$48.00 cwt. ($1,036-$1,058/mt or $940-$960/nt), and are expected to increase another $3.00 cwt. in the next seven-to-10 days as a reaction to higher prices in the Midwest. Government stimulus-supported projects and increases in state spending continue to be contributing factors keeping the West Coast tubing market afloat, as overall demand levels for HSS remain unchanged.
Despite continued low demand levels for specific projects, domestic US mills have seen a flurry of buying activity over the past few weeks from distributors who were hoping to lock in orders before last Friday's price hike, and heavier order books have consequently had an effect on lead times which are now entirely into January.
On the import side, although market players on both coasts report that higher US domestic prices have made import offerings more attractive than they have been in recent months, with delivery dates now in March, placing an order could depend on "how lucky you're feeling" said one service center in the South. Nonetheless, Turkish HSS offers persist and continue to generate US interest. Sources also indicate that Dubai has been increasingly successful in booking orders for delivery into Houston.
Looking at inventories from imports, November appears to have been the weakest month for offshore deliveries since November 2009. Preliminary license data from the US Steel Import Monitoring and Analysis System (SIMA) demonstrate that total import tonnage of structural pipe and tube fell significantly in November to 15,756 mt from the 24,086 mt in October, a sharp 53 percent month-over-month decline.
