US domestic hollow structural sections (HSS) spot prices dropped significantly in late May and the trend continues to point downward.
US domestic HSS spot prices are currently ranging from $53.00-$55.00 cwt. ($1,168-$1,213/mt or $1,060-$1,100/nt) ex-Midwest mill-down $3.00 cwt. ($66/mt or $60/nt) on the low end and down $2.00 cwt. ($44/mt or $40/nt) on the high end since our last report two weeks ago. The declines largely stemmed from downward pressure from the US domestic hot rolled coil (HRC) spot prices falling approximately $7.00 cwt. ($154/mt or $140/nt) between April and May. HRC spot prices currently range from $37.00-$38.00 cwt. ($816-$838/mt or $740-$760/nt) ex-Midwest mill.
The situation is similar on the West Coast where HSS spot prices have softened to $56.00-$57.00 cwt. ($1,235-$1,257/mt or $1,120-$1,140/nt) ex-West Coast mill-down $1.00 cwt. ($22/mt or $20/nt) since our last report two weeks ago. And if order activity, which has been especially quiet as of late, doesn't pick up, industry insiders predict another price reduction in July.
Since the start of June however, HSS spot prices have steadied at the above ranges as tubing mills attempt to prevent additional price declines. Any move the HSS market makes now will ultimately depend on the immediate direction of flat-rolled spot prices. HRC spot prices appear to have stabilized for the time being on the back of late-May price announcements from domestic mills, but any stability may be short-lived. If domestic HRC prices begin to waver again, the precarious HSS market will quickly follow suit, with another $2.00-$3.00 cwt. drop in early Q3 not out of the realm of possibility.
As expected, due to widespread belief that domestic tubing prices are poised to fall sooner rather than later, the import market has been quiet. The approximately $6.00 cwt. ($132/mt or $120/nt) spread between US tubing spot prices and South Korean offers in the range of $47.00-$48.00 cwt. ($1,036-$1,058/mt or $940-$960/nt) DDP loaded truck in US Gulf ports isn't nearly wide enough to entice many US buyers. A few orders for South Korean HSS have been placed on the West Coast where offer prices are in the range of $48.00-$49.00 cwt. ($1,058-$1,080/mt or $960-$980/nt) DDP loaded truck in US West Coast ports.
Mexican offers are also garnering some attention from US traders on the West Coast, with quick delivery times and sales prices in the US in the range of $53.00-$55.00 cwt. ($1,168-$1,213/mt or $1,060-$1,100/nt) DDP loaded truck in US West Coast ports. Mills south of the border are offering HSS to the Gulf in the range of $50.50-$52.50 cwt. ($1,113-$1,157/mt or $1,010-$1,050/nt) DDP loaded truck delivered into Houston.
