The four-week downtrend in US HRC prices has many within the US domestic hollow structural tubing sector thinking that an “official” downward adjustment in pricing is just around the corner. Current US HRC prices, while “still abnormally high,” have softened from their high of $97-$98 cwt. ($2,138-$2,161/mt or $1,940-$1,960/nt), FOB mill in late-September, to a current average range of $90-$92 cwt. ($1,984-$2,028/mt or $1,800-$1,840/nt), FOB mill.
“The last time we saw hot rolled in this range was in July,” a source said. “It’s only a matter of time before [the tube mills] make an official downward adjustment. The sky isn’t falling yet but the storm clouds are on the horizon.”
Another service center source agreed.
“What bothers us, as inventory holders, is we don’t want there to be too much spread between hot rolled and the conversion to tube [prices], and it feels like there’s a delay in the mills’ adjusting their prices,” he said. “We’re concerned they’ll keep holding on for as long as they can, and then come out with a huge decrease. We’re not an advocate for price drops, but we are an advocate for realistic numbers. We’d rather see a couple of smaller downward adjustments than one big one.”
For now, however, US HSS prices continue to hold steady, and are trending in the range of $115-$119 cwt. ($2,535-$2,624/mt or $2,300-$2,380/nt), FOB mill, reflecting no change since our last report a week ago.