As SteelOrbis reported last Friday, domestic hollow structural section (HSS) producers upped prices another $100/ nt, and it doesn't look like the price hikes are over yet.
A week ago, all of the major US domestic tubing mills sent announcements to their customers that, effective immediately, prices for hollow structural sections (HSS) would increase by $100 /nt ($5.00 cwt. or $110 /mt). The mills confirmed that all current orders on the books will be price protected for shipments through May 26, 2008.
This announcement follows two similar announcements made by domestic mills two and four weeks prior. Due to rising raw material costs and tight flat rolled supply, domestic tubing mills have continued to up their prices, and recently, every increase has been in triple-digits.
This newly announced large price increase pushes domestic HSS prices to a range of $68.00 cwt. to $69.00 cwt. ($1,499 /mt to $1,521 /mt or $1,360 /nt to $1,380 /nt) for A500 grade A and grade B hollow sections up to 6" in the Midwest regions.
It was also noted that this price increase will not only affect the cost of base products but also the extras charged for special grades.
Going forward, market chatter suggests that more increases are on the way, and that they are coming soon. Buyers have told SteelOrbis that by early next week the market is in for another increase, in the range of $70 /nt to $100 /nt ($3.50 cwt. to $5.00 cwt. or $77 /mt to $110 /mt). Even if mills issue increases on the lower end of that spectrum, the industry will still see HSS prices above $70.00 cwt. ($1,543 /mt or $1,400). However, there is a chance that once mills' prices reach the record-high $70.00 cwt. mark, prices may finally start to come down.
Some buyers are saying that demand is falling off more than usual and that mills won't be able to keep making these huge upward price adjustments. Mechanical sizes are seeing decent demand from the everyday customers, but large projects are being put on hold, hindering the demand for structural sizes.
Eventually, with HSS demand being so lackluster, domestic mills will not have enough sales and will be forced to accept orders at the previous levels since new offers will not be accepted. For now, the momentum is still on the tube producers' side, and the continuing flat rolled increases are helping to justify the new tube price increases.
On the service center level, the resale price for hollow structurals right now is up to $90.00 cwt. ($1,984 /mt or $1,800 /nt) and some items that are harder to get, such as larger rectangular sizes, are reselling for over $100.00 cwt. ($2,204 /mt or $2,000 /nt).
As a change in the market, buyers may see some import offers, though they are not regular or too competitive.
SteelOrbis had heard of a few import offerings below the domestic price. Taiwan recently had some offers in the range of $63.00 cwt. to $64.00 cwt. ($1,389 /mt to $1,411 /mt or $1,260 /nt to $1,280 /nt) FOB loaded truck at Gulf ports, although sizes were limited.
Flat rolled price increases have started to lose their upward drive in Turkey, which has helped to keep Turkish tubing offers stable for the first time in quite a while. For the larger sizes that are not involved in the antidumping determination, prices are now lower than the US domestic price, and the pricing trend is neutral, at least for now. Buyers might have some interest in purchasing offshore now that the prices are lower than the domestic levels, especially with domestic prices still trending upwards.
Turkish offerings to the Gulf Coast are still pricing out at $63.00 cwt. to $64.00 cwt. ($1,389 /mt to $1,411 /mt or $1,260 /nt to $1,280 /nt) FOB, loaded truck, US Gulf ports. (These offerings are for material that has not been affected by the antidumping determination for structural tubing.)
On the light-walled tubing side, however, the US Department of Commerce (DOC), on April 9, 2008, made its final dumping determination in the investigation of light-walled rectangular (LWR) pipe and tube from Turkey. The DOC determined that two Turkish producers made sales to the US market below normal value. The DOC has calculated a final weighted-average dumping margin of 41.71 percent for each company. A number of non-cooperating Turkish mills were listed with a final weighted-average dumping margin also of 41.71 percent, while all others were calculated at 27.04 percent. The US International Trade Commission (ITC) is planning to make its final injury determination in this investigation by the end of May 2008.