North American hollow structural section (HSS) prices are up $100 /nt so far this month and judging by the recent leap in auto bundle prices, there may be more increases to come.
So far 2008 has brought nothing but price increases to the US domestic steel market. Domestic tubing prices have continued to increase every month this year, with each new month bringing a heftier increase for buyers ($60 /nt in January, $60 /nt in February, $80 /nt in March, and $100 /nt in April). Mills cite increased raw material costs as the main reason for all of the recent increases, which leads buyers to believe that this is not the end of it.
Market sources have told SteelOrbis that auto bundle prices have risen by approximately $150 to $160 /long ton this week, which is expected to translate into a minimum increase of $80 /long ton for the industrial scrap market. If domestic scrap prices take another large leap as is expected, flat rolled producers will most likely follow the trend and push their prices up, which in turn will force HSS mills to once again up their prices.
Raw material costs continue to increase, yet demand is not all that strong, which causes most market players to believe that the market will have to peak one of these days, and then correct itself. As a result, buyers are becoming very cautious. The scary part is the correction; after $300 /nt ($15.00 cwt. or $331 /mt) in price hikes this year, buyers are a little nervous that they may get stuck with high-cost steel on their hands if a downward pricing spiral were to occur.
Currently, including the newly announced $100 /nt increase, prices for HSS range from $57.00 cwt. to $58.00 cwt. ($1,257 /mt to $1,279 /mt or $1,140 /nt to $1,160 /nt) for A500 grade A and grade B hollow sections up to 6" in the Midwest regions.
All of the major North American tubing producers announced late last week that, effective immediately for all new orders, HSS prices would be increasing by $100 /nt ($5.00 cwt. or $110 /mt) with most companies price protecting all current orders on the books through April 28, 2008.
Globally, prices are going up rapidly as well. International levels are higher than their domestic counterparts and very little is being offered to US customers by traders. There are scattered offers from Asian markets to the US West Coast and from Turkey to the Gulf; however, there are very little takers as the offering prices are very high.