While US tubing mills have been able to announce significant price increases over the last couple months due to the recent surge in flat rolled coil prices, domestic mills may take a little longer deciding their next move, even though flat rolled mills already announced further increases for October shipments.
Current domestic listed prices for hollow structural section (HSS) tubing continue to range from approximately $37.00 cwt. to $38.50 cwt. ($816 /mt to $849 /mt or $740 /nt to $770 /nt) ex-mill, for ASTM A500 Grade A and B, up to 6," since last month's $3.00 cwt. ($66 /mt or $60 /nt) mill increase announcements for September shipments. However, most domestic tubing spot offers continue to drift about $1.00 cwt. to $2.00 cwt. ($22/ mt to $44 mt or $20 /nt to $40 /nt) below listed prices depending on tonnage and size specifics.
Moving forward, tubing mills are expected to wait until the middle to end of September before announcing October prices even though flat rolled mills have already come out with a $1.50 cwt. ($33 /mt or $30 /nt) October increase. Most distributors have mixed opinions on whether domestic tubing mills will increase October prices. On one hand, mills may be careful and keep prices stable or increase them by only about $1.00 cwt. because demand remains low and mills will not want the gap between spot and listed prices widening into the fourth quarter, when demand is seasonably slower. However, on the other hand, others believe that domestic mills will increase prices by up to $2.00 cwt., taking full advantage of the flat rolled increase with the reasoning that, even if demand is slow, spot prices have firmed up a little in recent months and there is no real import threat to trump domestic offers.
Moreover, according to the most recent Metal Service Center Institute (MSCI) monthly shipment and inventory report, based on service center shipment levels, US pipe and tubing inventories continue to slowly decrease, from 631,700 nt in June to 618,800 nt in July. Daily and monthly shipments and average inventory overhang almost increased, albeit very marginally.
Meanwhile, on the import side, other than Mexican offers, the market remains in a depressed state and many traders have gone for days or even weeks at a time without even trying to check tubing offers, figuring that if there is anything out there it probably won't make sense to buy because of price and especially since most import lead times wouldn't deliver product to the US until the end of the fourth quarter. However, while there are no competitive offshore import offers, Mexican HSS tubing offers have recently been seen in the mid- $30s cwt. duty-paid FOB loaded truck at the US border crossing.
Licensing data from the US Steel Import Monitoring and Analysis System (SIMA) demonstrate that total import tonnage of structural pipe and tube remained almost unchanged from June to July, at 18,853 mt and 18,659 mt respectively. Canada and Mexico were the top exporters of structural pipe and tube to the US in July, with 13,252 mt and 3,634 mt respectively.