Cracks have begun to emerge in the US domestic hollow structural section (HSS) market's uptrend, as uncertainty regarding the flat rolled market looms. In mid-August, domestic HSS spots increased about $1.50 cwt. ($33/mt or $30/nt) to $46.50-$47.50 cwt. ($1,025-$1,047/mt or $930-$950/nt) ex-Midwest mill, as mills were quoting higher prices. However, although asking prices remain at about $48.50 cwt. ($1,069/mt or $970/nt) ex-Midwest mill, transaction prices have not moved in the last two weeks. Additionally, larger buyers are paying little, if any, of the announced increases and are holding off any major buys until the immediate flat rolled market's price trend becomes clearer. In the last couple weeks, domestic flat spots have stagnated, as the market awaits the results of labor negotiations at ArcelorMittal USA and US Steel. HSS industry insiders explained that if a labor resolution is signed and flat rolled prices drop, it won't be long before tubing prices follow suit.
With the concern that domestic HSS prices may drop sooner rather than later, most buyers are shying away from the import market, especially those not situated near a port and are therefore more sensitive to freight rates. Italian and Korean HSS offers to the US are currently $38.50-$39.50 cwt. ($849-$871/mt or $770-$790/nt) DDP loaded truck in US Gulf ports, in the same range as Turkish offers, which are unchanged since last week. Those considering import material have been looking to Mexico, where prices delivered to Houston can be negotiated down to about $39.00 cwt. ($860/mt or $780/nt) or even slightly lower. For the most part, though, US buyers looking to fill inventory holes aren't deviating much from domestic suppliers.