Less than a month after US domestic tubing mills increased hollow structural section (HSS) tubing prices by $2.50 cwt. ($55 /mt or $50 /nt) for October shipments, mills have unofficially pulled more than half the increase back.
While most distributors understood domestic mills were trying to get as much as they could on the heels of the flat rolled pricing momentum that continued into the beginning of September, it appeared very unlikely that the $2.50 cwt. tubing price increase would stick.
Now, as demand has remained lethargic and the flat rolled pricing momentum has begun to slow, domestic tubing mills have begun offering about $1.50 cwt. ($33 /mt or $30 /nt) off their initial October prices to most of the larger customers and service centers. As a result, most mills' transaction prices now range from approximately $38.00 cwt. to $39.50 cwt. ($838 /mt to $971 /mt or $760 /nt to $790 /nt) ex-mill, for ASTM A500 Grade A and B, up to 6." However, the majority of actual transactions on sizable tonnage are still concluded at around $1.00 cwt. ($22 /mt or $20 /nt) or so under mill asking prices.
Moving forward, domestic mills will likely keep transaction prices neutral because at this point, not much business is expected for the duration of the year anyway. Furthermore, domestic mills should not have much to worry about in terms of losing business to import ; however, the pressure from Mexico may be getting a little higher.
The bottom line is that there just isn't much demand for HHS tubing from US buyers, be it domestic or import. Nevertheless, Mexico has reduced their offers by approximately $2.00 cwt. ($44 /mt or $40 /nt) from our last report two weeks ago, and have been offering at around $36.50 cwt. to $38.00 cwt. ($805 /mt to $838 /mt or $730 /nt to $760 /nt) delivered to Southern California and at about $34.00 cwt to $35.00 cwt. ($750 /mt to $772/ mt or $680 /nt to $700 /nt) delivered to Houston. Korea has also attempted to stay in the import conversation as an offshore supplier of HSS tubing; however, their offers have remained too high to attract any US interest, with most offers generally at around $38.00 cwt. ($838 /mt or $760 /nt) duty-paid, FOB loaded truck in West Coast ports.
Preliminary license data from the US Steel Import Monitoring and Analysis System (SIMA) demonstrate that total import tonnage of structural pipe and tube has decreased for the third consecutive month in September, falling from 17,351 mt in August to 12,415 mt. September's pipe and tube imported tonnage is staggeringly low compared to the 43,291 mt recorded a year ago in September 2008. Only Canada, at 7,866 mt, and Mexico, at 2,401 mt exported more than 1,000 mt to the US in September.