US hollow structural section (HSS) demand throughout most of January had been decent, but in the last week or so, purchasing activity has slowed as buyers are concerned that the expected $30/lt drop in busheling scrap prices in February and slight softening of domestic flat rolled prices will spill into the HSS market. Still, on account of previous increases in the flats market and adequate demand, HSS mills were able to increase spot prices as much as $2.00 cwt. ($44/mt or $40/nt) on the high end in the last two weeks to $50.00-$52.00 cwt. ($1,102-$1,146/mt or $1,000-$1,040/nt) ex-Midwest mill. Tubing mills' latest price increase for $3.00 cwt. ($66/mt or $60/nt) has been partially absorbed, but spot prices are still below official prices of $53.00 cwt. ($1,168/mt or $1,060/nt).
But now that flats prices have started to deteriorate, tubing distributors are reluctant to stock inventories, especially since they are unable to sell HSS at replacement cost and are forced to sell off average costs instead. The lack of long-term forecasting in the domestic market has continued to curb import activity as well, although there have been a few orders placed with Turkish mills in the last week at approximately $42.50-$43.50 cwt. ($937-$959/mt or $850-$870/nt) DDP loaded truck in US Gulf ports, a $0.50 cwt. ($11/mt or $10/nt) drop from mid-January.