Despite last week's market chatter suggesting that domestic tubers would be increasing their prices shortly after the July 4th holiday, domestic mills report that they are now trying to get a better grasp on the raw material pricing situation before making any drastic moves, and so have temporarily postponed the increase.
Market sources confirm that domestic hollow structural section (HSS) producers are still planning for a price increase, but they want to wait and see where flat rolled prices stand before announcing an increase to customers. Last week, the market was buzzing about an early July increase, but now it looks as if domestic HSS mills are going to wait until at least late July, if not early August, to determine the magnitude of their next increase.
Busheling scrap prices are up approximately $100 /lt since early June, and although flat rolled mills have yet to make their next pricing announcements, it is expected that they will push through at least some of the added raw materials cost to customers. Depending on how much flat rolled prices increase, tubing mills may raise their prices by as much as another $5.00 cwt. ($110 /mt or $100 /nt) this summer.
Currently, domestic hollow structural section (HSS) prices range from $73.00 cwt. to $74.00 cwt. ($1,609 /mt to $1,631 /mt or $1,460 /nt to $1,480 /nt) for A500 grade A and grade B hollow sections up to 6" in the Midwest regions.
HSS supply is tight, which makes it easier for domestic mills to justify hefty price increases. However, the lack of HSS imports, rather than strong end-use demand, is the main culprit behind the tight inventories. With the continuing weakness of the US dollar, other countries are not interested in shipping their material to the US. As for the countries that are offering HSS to the US, their offers are priced at levels much higher than US customers are willing to pay.
Turkish offers for heavy wall HSS have been seen by many Gulf Coast buyers, although many buyers say that they are not interested because the price difference is only a few dollars, which does not make these deals worth the risk or the long lead times. Turkish offers to the Gulf Coast are currently ranging from $70.00 cwt. to $72.00 cwt. ($1,543 /mt to $1,587 /mt or $1,400 /nt to $1,440 /nt) FOB loaded truck US Gulf Coast ports.
Tubing buyers are not purchasing Chinese material right now, although offers (based on their sales to other markets) would be approximately $69.00 cwt. to $71.00 cwt. ($1,521 /mt to $1,565 /mt or $1,380 /nt to $1,420 /nt) FOB loaded truck West Coast ports. South Korean offers are also heard of on the West Coast, but they are generally limited in quantity.
Data from the US Import Administration show that, for structural pipe and tube, worldwide exports to the US totaled 46,033 mt in June 2008. The top three exporters to the US were: Canada at 29,834 mt; Mexico at 6,055 mt; and South Korea at 6,040 mt.