A price increase for about $2.00 cwt. ($44/mt or $40/nt) is anticipated from US domestic tubing mills any day now, prompting some buyers to make hedge buys. Ever since flat rolled mills announced price increases last week for $2.00 cwt., the tubing market has expected hollow structural section (HSS) mills to follow suit. Missouri-based Bull Moose Tube followed rapidly with an increase for shipments after November 12, but sources told SteelOrbis that increase came early due to maintenance outages and other factors, and therefore was not considered a market leading move. Further, the majority of tubing mills needed to wait until the flat rolled price increase gained at least some momentum to give an HSS increase more chance for success. And now that flat rolled spots are inching higher and rumors of a second increase are growing more pronounced, tubing mills will try for an increase of their own.
The increases come as domestic HSS spots have been trending down again over the past couple weeks. While the majority of transactions are still taking place around $44.00 cwt. ($970/mt or $880/nt) ex-Midwest mill, unchanged from last week, larger buyers are able to pay around $43.50 cwt. ($959/mt or $870/nt) ex-mill or slightly lower, especially if a mill is looking to sell on-the-ground inventory. Even though demand levels are stagnant, with distributor inventories relatively low and flats prices trending higher, the pricing outlook for HSS is positive, at least for the next couple weeks. However, with a longer term outlook especially foggy, the bulk of US buyers aren't willing to take the import risk-even though some could be find placing smaller order with Mexican mills at prices about $4.00 cwt. ($88/mt or $80/nt) below domestic spots, offshore bookings remain sporadic and minimal.