With the continued pricing downticks on hot rolled coils (HRC), US domestic spot pricing for hollow structural section (HSS) tubing has taken a hit since our last report two weeks ago, with the expectation of further softening to take place until "flat rolled mills become more realistic about necessary production levels."
Spot prices for ex-Midwest HSS are down approximately $3.50 cwt. ($77/mt or $70/nt) since our previous report, with average transaction ranges now being seen at about $41.50 cwt. to $42.50 cwt. ($915/ mt to $937/mt or $830/nt to $850/nt), with ex-West Coast transactions only about $1.00 cwt. ($22/mt or $20/nt) below previously reported levels, between $46.00 cwt. to $47.00 cwt. ($1,014/mt to or $1,036 or $920/nt to $940/nt). Deals below these ranges, however, have been reported in abundance.
"It's just really rough out there," commented one Midwest service center. "It's a combination of pricing going down and a shoddy market." The big frustration relayed by those buying HSS is that their customers are taking a closer look at the bigger picture, and waiting until the last possible minute to buy in order to obtain the best deal. "It's like with gas prices," he added. "If you have half a tank and they're going up, you buy. But if they're going down, you'll wait a few days."
And with end users holding onto their purse strings, sellers are continuing to battle it out for orders. "Some of the service centers are just giving stuff away," commented another. "We've got one or two out there that are just screwing up the whole market."
Looking West, it's a similar situation, with strong indications that anyone wanting to buy significant tonnage on the West Coast would very likely be able to buy very close to the same price they're selling ex-Midwest, further noting that deals are readily available for the right order on the right day.
For now, the forecast is slightly downward, with the anticipation that domestic HSS will continue to follow along the path of HRC, denoting slow yet steady declines until market, production curbing, and economic factors allow for more favorable conditions.
In terms of overseas offerings, reports are quiet, with a number of traders having indicated that they haven't heard much of anything. To that same token, commented another, he "hasn't been looking because no one has been asking", which has been the general consensus among those we've spoken to. As with other product lines, until the domestic picture becomes more apparent, interest in futures will remain relatively bated.
