The domestic tubing market has been on edge since our last report a week ago, as all eyes turn to hot rolled coils (HRC), which continue to see an upsurge in spot prices.
Hollow structural sections (HSS) spot prices ex-West Coast mill are up $3.00 cwt. ($66/mt or $60/nt) to $50.00-$51.00 cwt. ($1,102-$1,124/mt or $1,000-$1,020/nt) this week-an expected response to last week's $3.00 cwt. increase in ex-Midwest spot prices. This week's spot prices ex-Midwest mill, still $46.00-$48.00 cwt. ($1,014-$1,058/mt or $920-$960/nt), are unchanged for the moment, but another price announcement, which is expected to fully stick as fast as the most recent one less than two weeks ago, appears to be looming on the horizon.
The upward momentum is predicted to continue through at least Q1 2011, as domestic scrap prices are almost sure to significantly increase once again in January, and there has been a strong indication of a new $1.50-$2.00 cwt. ($33-$44/mt or $30-$40/nt) price increase announcement in the works from Nucor for flat-rolled products this week.
Buying activity remains strong as a number of buyers report deciding to fill inventory holes sooner rather than later, before the next increase is announced and spot offers at the lowest end of the above ranges disappear entirely. Additionally, one Southeast service center told SteelOrbis that "extremely lean inventories just before the Thanksgiving holiday are coming back to haunt some distributors" who will now be forced to make purchases at higher prices.
As much of the floor-stock product has been bought up, and the winter months and holiday season upon us, resulting in fewer trucks available, lead times have been pushed entirely into late February, and "you better know someone if you need product by January" commented one Southern distributor.
On the import side, sources indicate that the risk of purchasing imports isn't as prominent as it has been in recent months, and the upward trending domestic spot prices have convinced some domestic buyers to consider offers from offshore sources-Turkey in particular, which is currently offering its HSS at approximately $44.00-$46.00 cwt. ($970-$1,014/mt or $880-$920/nt) FOB loaded truck in US Gulf ports.
