US domestic tubing prices have fallen another notch since SteelOrbis' last analysis of two weeks ago, with more decreases expected to follow.
Domestic tubing mills are now offering hollow structural sections (HSS) in the range of $64.00 cwt. to $65.00 cwt. ($1,411 /mt to $1,433 /mt or $1,280 /nt to $1,300 /nt) for A500 grade A and grade B hollow sections up to 6" ex-mill. This pricing level represents about a $2.00 cwt. ($44 /mt or $40 /nt) drop in the last two weeks and, according to buyers, more decreases are expected to follow.
"Demand is terrible; there is none really," commented one US tubing buyer during a discussion about the tubing market. According to most, demand isn't expected to strengthen in the near future, and is uncertain even going into the first quarter of next year. On the service center level, demand has fallen off as end-use markets have continued to weaken. As the end of the year is fast-approaching, inventory reduction is taking place at many US service centers, hurting domestic mills.
Domestic mills are said to have an excess of floor stock, despite the lower numbers they are offering to customers. Mills are trying desperately to get orders, lowering numbers to attract customers; however, there is just a little buying activity from distributors.
Going forward, domestic spot prices are expected to slip further, mainly due to the weak demand and crumbling market in general. Also, busheling scrap prices have plummeted, with numbers falling almost $300 /long ton in the last month. This and the weakening flat rolled market will also strongly affect tubing mills' prices for their customers.
While numbers are falling domestically, import offers are also beginning to look more attractive; however in a declining market, especially when there is minimal demand, no one is looking to buy. The more attractive offshore offers may, however, begin to pique some interest going into the first quarter, when perhaps there is a little insight on where the market is headed next year. As for now, it's too risky to buy offshore when domestic numbers are falling so hard and fast.
Turkish offers to the Gulf are available at competitive numbers, though there are few takers. Turkish offers are available in the high $50's cwt. with prices expected to fall even further.