LOS ANGELES West Coast
producers of structural steel tubing and their service center
customers are looking for signs that the market is ready to
firm, but prices have instead been slipping.
For the first time in more than
a year, prices for A500 Grade B hollow structural sections
(HSS) have in some cases fallen below $50 per hundredweight
($1,000 per ton) from a more recent range of $50 to $51 per
The decline has occurred despite
the fact that a number of tubing mills east of the Rockies
recently announced they were raising tags by $30 per ton.
However, California tubing
mills, in particular, havent followed these attempts by
their counterparts in the Midwest and South, who have lost
credibility over the past two years as a number of their
published hikes have either fallen flat or been deeply
discounted as soon as they were posted.
Several market sources in the
West said theyre refusing to take these announcements
seriously until theyre convinced the market is actually
Some sources argue that while
tubing demand is still far from its pre-2009
construction-fueled strength, it hasnt declined
appreciably this year and certain small and mid-sized projects
continue to move forward.
But even the most optimistic
agree that prices have felt the impact of the recent arrival of
South Korean tubing into distributor warehouses that was
ordered at $42 per cwt ($840 per ton) or less in late 2011 and
early 2012. At the time, expectations were that prices would
have continued to firm at least through the first half of the
"An awful lot of foreign
material has come in, and were expecting more," one buyer
Moreover, the recent erosion of
prices on the mills coil feedstock has made it
increasingly difficult for producers to defend a floor price of
$50 per cwt, market sources noted.