US domestic hollow structural section (HSS) prices have slid some more in the past couple of weeks as demand has continued to weaken and buying activity has come to a halt.
Domestic
tubing producers have dropped spot prices another notch in an attempt to get more business.
Tubing mills are said to have an excess of floor stock and are readily trying to sell it off, while demand has been trailing off for the last couple of months, and the usual buyers are not making many purchases.
In an effort to spark some interest, US
tubing mills are willing to offer material at lower numbers. Current spot prices for domestic HSS now range from $66.00 cwt. to $68.00 cwt. ($1,455 /mt to $1,499 /mt or $1,320 /nt to $1,360 /nt) for A500 grade A and grade B hollow sections up to 6” ex-mill. On average, this represents an approximate $3.00 cwt. ($66 /mt or $60 /nt) decrease from our last report two weeks ago.
There are many factors that have been contributing to this downtrend in HSS pricing. On a larger scale, the US economy has been seeing some hard times, and the US dollar, while strengthening some recently, is still pretty weak. Pricing for raw materials, including busheling
scrap and flat rolled steel, has been on a decline in recent months as well. Busheling
scrap prices plummeted in early September, and another drop is anticipated for October. The flat rolled market has weakened drastically in recent months, as demand from the
automotive sector has fallen off, leaving mills forced to lower their numbers.
In addition to the weak economy and falling raw materials pricing, no one is buying. Service centers are in inventory reduction mode as the end of the year is approaching, and fabricator business has been slowing as well. Expectations are that prices are going to fall further, leaving no reason for buyers to purchase now. As it is, service centers have said they have been left with more expensive steel, after overstocking when the prices were going up so rapidly.
A market rebound isn’t anticipated to occur any time soon and imports are expected to be a larger threat to the US domestic market come 2009. Demand has trailed off on a global scale, and off-shore steel prices have fallen significantly in recent months as well, which may create an influx of imports in the months to come.
In
Turkey, flat rolled prices have been on a stiff decline recently, allowing
tubing mills to offer more competitively. Although offerings are still not low enough to attract many US buyers, they are expected to fall further. Turkish offers are now slightly below $60.00 cwt. ($1,323 /mt or $1,200 /nt) FOB loaded truck, US Gulf Coast ports.
Tubing offerings from South
Korea have surfaced and are in the range of $61.00 cwt. to $62.00 cwt. ($1,345 /mt to $1,367 /mt or $1,220 /nt to $1,240 /nt) FOB loaded truck, US West Coast ports.
In addition, West Coast service centers have reported some Mexican material ranging from $63.00 cwt. to $64.00 cwt. ($1,289 /mt to $1,411 /mt or $1,260 /nt to $1,280 /nt) delivered to the West Coast.