The domestic hollow sections market is currently awaiting a price hike that will reflect the rising prices for flat rolled products, the raw material for
tubing.
The expected increase will be at between $40 /nt and $50 /nt ($44 /mt to $55 /mt or $2.00 cwt. to $2.50 cwt.), effective for June shipments. Some major mills have already sent an increase announcement for this period. Potentially, we could see another increase for July shipments, and by the end of summer, prices may top $48.00 cwt. ($1,058 /mt or $960 /nt).
Demand for
construction-related steel products, including some of the larger structural
tubing, is still solid. With increasing beam prices and strong demand from non-residential
construction, all the signs indicate that
tubing prices will continue to rise until the fourth quarter.
This week, domestic hollow section prices are still reported at above $42.00 cwt. ($926 /mt or $840 /nt).
Demand for imported
tubing is still decent, however, there are still many low-priced Chinese offers out there, for both ornamental and structural sizes. Therefore, import booking prices have not increased in the past several weeks because Chinese prices have not risen significantly, keeping offers from other major player,
Turkey, stable.
Chinese prices might change quickly though, as most Chinese mills will have to figure out the duty drawback decrease and how it may affect their bottom line. The Chinese government is about to announce a legislative change, decreasing the rebate on a value-added tax which could go into effect in June.
Some of the usual Chinese importers are now withdrawing their offers and waiting for the official announcement. The
tubing deals that were booked a long time ago but haven't shipped yet may also look more questionable if the Chinese government changes the legislation quickly.
Therefore, the pricing trend is strongly up, as Chinese prices may jump by $40 /nt to 50 /nt due to the legislative change, giving relief to Turkish and Korean offers that are pushing for higher prices.
However, for now the import offers from
Turkey still range from $34.00 cwt. to $35.50 cwt. ($750 /mt to $783 /mt or $680 /nt to $710 /nt) for FOB, loaded truck, US Gulf Coast ports. East Coast prices are $0.50 cwt. to $1.00 cwt. ($11 /mt to $22 /mt or $10 /nt to $20 /nt) higher than Gulf Coast prices.
Offers from
China range from $32.00 cwt. and $34.00 cwt. ($705 /nt to $750 /mt or $640 /mt to $680 /nt) FOB West Coast ports, and are approximately $0.50 cwt. higher for Houston discharge.