Spot prices in the US domestic hollow structural sections market (HSS) are beginning to move up, as mills appear on the brink of issuing another price increase.
Over the last two weeks, US domestic tubing mills have been pushing for higher prices on all new HSS orders, as they attempt to implement their $3.00 cwt. ($66/mt or $60/nt) price increase announced in the latter half of August. While sources tell SteelOrbis that a number of mills still have many common sizes already in stock that are being sold off at pre-increase levels, the vast majority of spot market transactions are being placed in the range of $48.00-$50.00 cwt. ($1,058-$1,102/mt or $960-$1,000/nt) ex-Midwest mill, a $1.00 cwt. ($22/mt or $20/nt) increase from late-August spot prices.
Considering that the initial $3.00 cwt. US domestic flat-rolled price increase in early August has been absorbed in the domestic market, domestic HSS prices are likely to rise by at least the same amount over the coming weeks (another $2.00 cwt.), especially if tubing mills announce another increase for $2.00 cwt. ($44/mt or $40/nt), akin to a similar flat-rolled increase in late-August. Such a move is expected by the end of September, according to industry insiders, who tell SteelOrbis that tubing mills are already telling customers that another increase is looming, which would bring tubing mill asking prices over $50.00 cwt. ($1,102/mt or $1,000/nt) ex-Midwest mill.
Even so, few buyers are making large purchases ahead of the increase. Although a number of distributor sources indicate that they have quite a few inventory holes, they are apprehensive about building too much inventory when the current boost in domestic prices may be short-lived. Demand for tubing, which primarily stems from the largely stagnant construction market, is anemic, and how well mills will be able to hang on to higher prices is still uncertain.
Import activity isn't particularly lively either, and while a few orders have been placed for Korean HSS in the range of $44.00-$45.00 cwt. ($970-$992/mt or $880-$900/nt) DDP loaded truck in US Gulf ports, $4.00-$5.00 cwt. ($88-$110/mt or $80-$100/nt) below US domestic prices, most US buyers still aren't willing to take the risk. Turkish offer prices to the US are about $1.00 cwt. above Korean prices, reflecting an increase of about $0.50 cwt. ($11/mt or $10/nt) in the last two weeks--and as with Korean offers, while a few orders are being sporadically booked, interest in imports is mostly silent.