US domestic tubing mills have announced yet another $100 /nt price hike, and the upward pricing trend is expected to continue.
Last Friday, all of the major US domestic tubing mills sent announcements to their customers that, effective immediately, prices for hollow structural sections (HSS) would increase by $100 /nt ($5.00 cwt. or $110 /mt). The mills confirmed that all current orders on the books will be price protected through May 12, 2008 shipments.
This announcement follows a similar announcement that was made just two weeks prior. Major North American mills announced to customers in late March that they were upping prices by $100 /nt due to higher raw material costs. Here we are, just fourteen days later, and the same announcement hits buyers' inboxes; only this time, the prices are even higher, pricing out in the low $60's cwt.
Currently, including the newly announced $100 /nt increase, prices for HSS range from $62.00 cwt. to $63.00 cwt. ($1,367 /mt to $1,389 /mt or $1,240 /nt to $1,260 /nt) for A500 grade A and grade B hollow sections up to 6" in the Midwest regions.
Although demand for HSS is not all that strong in the US, mills are still able to get their asking price. Import competition is nonexistent as offshore prices are even higher than the obscene domestic numbers. Most import sources are not even offering to the US, but the few that are offering have numbers that are too high to spark any interest. Also, scrap prices and flat rolled prices are going up so rapidly that domestic tubing mills really don't have much of a choice but to raise their numbers to keep up with the higher raw material costs, and buyers know this.
If this trend continues, and it is expected to, at least in the short term, we will surpass the $2,000 /nt ($100 cwt. or $2,205 /mt) mark in no time. Scrap processors are predicting another increase for May, and flat rolled mills are going up with prices on what seems like a daily basis. At this rate, the industry may be seeing another $100 /nt price hike in another two weeks, and it wouldn't come as a surprise to most.
Usually when the domestic trend continues going up, buyers turn to imports to replenish their stock; however, in this market barely anyone is buying from offshore. Import numbers are soaring and are not expected to come down any time soon. SteelOrbis has learned of Turkish offerings to the Gulf Coast that are pricing out at $63.00 cwt. to $64.00 cwt. ($1,389 /mt to $1,411 /mt or $1,260 /nt to $1,280 /nt) FOB, on loaded truck, US Gulf ports. These offerings are for material that has not been affected by the antidumping determination.
Even when the day comes that import prices are at a reasonable level, the US will be seeing much less of Turkish tube than it has in the past. The US Department of Commerce (DOC), on April 9, 2008, made its final dumping determination in the investigation of light-walled rectangular (LWR) pipe and tube from Turkey. The DOC determined that Turkish producers Guven Boru Profil Sanayii ve Ticaret Ltd Sirketi and MMZ Onur Boru Profil Uretim San. & Ticaret A.S. both made sales to the US market below normal value. The DOC has calculated a final weighted-average dumping margin of 41.71 percent for each company. A number of non-cooperating Turkish mills were listed with a final weighted-average dumping margin also of 41.71 percent, while all others were calculated at 27.04 percent. The US International Trade Commission (ITC) is planning to make its final injury determination in this investigation by the end of May 2008.