US domestic hollow structural section (HSS) tubing mills have faced the music, so to speak, this month after finally rescinding their full $2.50 cwt. ($55 /mt or $50 /nt) October price increase.
Earlier in the month, HSS domestic tubing mills rescinded about half of the October increase but hoped to still be able to salvage some of it. However, none of it stuck, and demand is creeping back down to some of the lowest levels of the year as the end of the year approaches.
As a result, most domestic mills are back to offering HSS tubing for around $37.50 cwt. to $38.50 cwt. ($827 /mt to $849 /mt or $750 /nt to $770 /nt) ex-mill; however, the majority of spot offers on any sizable tonnage are heard to be concluded at closer to $36.50 cwt. to $37.50 cwt. ($805 /mt to $827 /mt or $730 /nt to $750 /nt) ex-mill, with the possibility to perhaps negotiate even a little further down depending on order specifics.
Moving forward, US tubing producers will try to hold on as tight as they can over the next two months, but they may not be able to prevent prices from sliding further. One tubing distributor said to SteelOrbis this week, "We have been dreading the slowdown in this year's holiday months, but this November is expected to be really bad and December may be the worst we've ever seen." Furthermore, HSS tubing prices will continue to be very closely tied to the flat rolled market. And after experiencing a significant uptick over the past several months, the flat rolled market appears to be falling back a little, which may force domestic tubing mills to ease their pricing even further.
While there just isn't much demand for HHS tubing, be it domestic or import, some Asian offers have been attracting a little more attention from traders recently. Within the past couple weeks, Japanese HSS tubing offers have popped up on many traders' radar, with offers ranging from around $35.00 cwt. to $36.00 cwt. ($772 /mt to $794 /mt or $700 /nt to $720 /nt) duty-paid, FOB loaded truck in Gulf ports. Japanese offers have apparently become the front-runner in the import HSS tubing market. However, most customers are still not likely to be persuaded to buy at this point.
Meanwhile, Korea has managed to keep its foot in the US import tubing market, but its offers remain too high at approximately $38.00 cwt. ($838 /mt or $760 /nt) duty-paid, FOB loaded truck in Gulf ports. Nevertheless, Korean mills could lower offers in the coming weeks to stay competitive with the Japanese. Import offers of HSS tubing from the south border have been very quiet in recent weeks with most Mexican offers continuing to range from $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.
Preliminary license data from the US Steel Import Monitoring and Analysis System (SIMA) demonstrate that total import tonnage of structural pipe and tube decreased for the third consecutive month in September, falling from 17,380 mt (census data) in August to 16,965 mt. September's pipe and tube imported tonnage is significantly lower than the 43,291 mt recorded a year ago in September 2008. Only Canada, at 12,165 mt, and Mexico, at 2,610 mt exported more than 1,000 mt to the US in September.