Although demand for hollow sections in the
US is relatively strong,
tubing producers have once again lowered their prices, following the trend of the flat rolled market.
Market players believed the domestic flat rolled market finally reached bottom when prices fell into the $26.00 cwt. ($573 /mt or $520 /nt) range. However, we are now seeing even lower prices, and they may even fall another notch. Abandoned availability and cheaper raw materials have resulted in
tubing mills having to lower their prices yet again, this time by approximately $2.00 cwt. ($44 /mt or $40 /nt).
Domestic hollow section prices are now in the range of $39.00 cwt. to $41.00 cwt. ($860 /mt to $904 /mt or $780 /nt to $820 /nt) for A500 grade A and grade B hollow sections up to 6”. Prices may even be lower in some regions. There is also a good possibility that they may slide again, shrinking the gap between domestics and imports.
Despite the fall in prices, the demand remains fairly strong.
Consumption is strong, especially for structural
tubing, as non-residential and industrial
construction is still active throughout the country. Service centers have moderate inventories and are working on adding more stock. Buyers had been taking advantage of lower-priced imports for early second quarter shipments. However, at the present time import prices are increasing.
When it comes to imports,
China is the lone import source at the lower end of the pricing spectrum. Still,
China is experiencing rising local flat rolled prices, and mills have passed that increase on to hollow sections, upping prices by $0.50 cwt. ($11 /mt or $10 /nt). Even though Chinese prices have increased some,
US buyers are currently booking plenty of orders to ensure their supply meets demand. There are major gripes about long-delayed Chinese shipments and quality issues. This forces buyers to diversify their import sourcing to other countries such as
Turkey, even if the Turkish
tubing is offered at least $50 /nt higher than the Chinese offers.
Chinese offers now range from $30.00 cwt to $31.50 cwt. ($661 /mt to $694 /mt or $600 /nt to $630 /nt) FOB West and Gulf Coast. East coast discharge is approximately $0.50 cwt. ($11 /mt or $10 nt) higher.
Hollow sections offers from
Turkey have also increased by $0.50 cwt. since our last report two weeks ago, now ranging from $32.50 cwt. to $34.00 cwt. ($717 /mt to $750 /mt or $650 /nt to $680 /nt) for FOB, loaded truck,
US Gulf Coast ports.
It is also worth mentioning that there are still aggressive Mexican
tubing offers to Texas at approximately $31.00 cwt. delivered ($683 /mt or $620 /nt) for sizes up to 6”.
License data from the United States Import Administration for structural
pipe and tube shows for the first half of January 2007 that the top three exporters to the
US were:
China at 11,658 mt,
Canada at 5,328 mt, and
Turkey at 5,268 mt. For mechanical
tubing, the top three exporters to the
US were:
China at 10,934 mt,
Mexico at 3,838 mt, and
Canada at 3,081 mt. The above statistics are for license data collected through January 16, 2007.