While overall demand for hollow structural section (HSS) tubing hasn't increased much over the past couple months, US tubing mills have announced a $3.00 cwt. ($66/mt or $60/nt) price increase effective on shipments after January 27.
The announcement was made Monday evening by Ontario-based Atlas Tube; other tube makers immediately followed. This marks the second time this month mills have announced a $3.00 cwt. ($66/mt or $60/nt) increase on HSS tubing, making for a significant $6.00 cwt. (conversions) total increase this month. However, these price increases are almost entirely attributable to rising cost-pressure from raw materials rather than strong demand. For this reason, mills may have a hard time getting customers to accept their new offer prices.
After Monday's increase, most US tubing mills are now pushing to get about $43.00 cwt. to $44.00 cwt. ($950/mt to $970/mt or $860/nt to $880/nt) ex-mill. However, the latest price increase hasn't been fully absorbed yet and prior to the announcement, actual spot deals were already been trending below mill asking prices. Therefore, most buyers should realistically expect to be able to book spot offers at around $39.00 cwt. to $40.00 cwt. ($860/mt to $882/mt or $780/nt to $800/nt) ex-mill. Spot market prices are likely to continue trending slightly up, though, as mills are expected to keep pressing to get their newly-announced offer prices.
Despite the strengthening prices, the lack of demand is forcing most buyers to remain cautious when making decisions. Without necessary demand, some buyers are worried that the escalating tubing prices are developing another price bubble, albeit on a smaller scale than in 2008. This lack of confidence in the market forecast continues to be detrimental to tubing imports as well.
Offshore tubing sources have struggled to maintain a consistent presence in the US market, though most offers aren't competitive enough to be workable. There may be a deal here or there from usual sources such as Korea or Taiwan, but most traders are expecting very little in terms of realistic offers from offshore mills. Even ifimport sources were able to provide competitive offers based on price , long lead times and uncertainty about the market's future are stopping most buyers from even inquiring about price. Mexican mills have managed to stay somewhat active, offering HSS tubing at around $38.00 cwt. to $40.00 cwt. ($838/mt to $882/mt or $760/nt to $800/nt) delivered to California and Texas; however, sizes are limited.
Preliminary census data from the US Steel Import Monitoring and Analysis System (SIMA) demonstrate that total import tonnage of structural pipe and tube increased from 15,513 mt in November (final census data) to 18,952 mt in December. While Canada, at 10,577 mt, was the top exporter of structural pipe and tube to the US in December, Korean exports to the US spiked from close to zero imports in November to 3,167 mt in December, also marking the first time the country exported more than 1,000 mt to the US since February 2008.