Last week, US domestic hollow structural sections producers announced a price increase of $2.00 cwt. ($44/mt or $40/nt), effective with all new orders; the announcement was rolled out within days of US flats mills announcing a similar $2.00 cwt. ($44/mt or $40/nt) price increase on US HRC.
“On one hand, we see limited imports until Q1 2018 because everyone backed off from buying after the Section 232 investigation was announced. We also see that the flats mills are booking through Q4 2017, not to mention they’re putting in planned outages. This is what’s driving the price increases. It’s certainly not demand,” a source said.
On the other hand, it’s currently forecast that US domestic scrap prices in the East coast and the Ohio Valley will settle at soft-sideway during the November buy-cycle. Combined with an overall expectation that the US flat rolled price increase will not be accepted by buyers, it’s largely believed that US tube mills will be unsuccessful in pushing current spot market prices above their current level, which remains at $47.50-$49.00 cwt. ($1047-$1080/mt or $950-$980/nt), ex-mill.
In terms of overall business conditions, another source described the state of the market as being “OK at best,” adding that the market has begun its annual Q4 slowdown.