CHICAGO Domestic hollow
structural sections (HSS) producers have announced price
increases following a similar boost in steel coil tags.
While the move was widely
anticipated, buyer sources were skeptical Monday about whether
the increase of at least $50 per ton ($2.50 per hundredweight)
might stick or to what extent, given uncertainty surrounding an
attempt by coil mills to increase their own prices (
amm.com, Nov. 16).
The latest round of HSS hikes
was kicked off by Chicago-based JMC Steel Group Inc. subsidiary
Atlas Tube Inc., which said in a letter to customers dated
Friday that prices would increase by a minimum of $50 per ton
for HSS shapes through 12 inches square, equivalent rectangles
and HSS rounds through 20 inches in outside diameter, effective
with all new orders. Atlas said orders already on the books
would be kept at pre-increase levels through Dec. 15
Independence Tube Corp., Chicago; Maruichi Leavitt Pipe &
Tube LLC, Chicago; Welded Tube of Canada Ltd., Concord,
Ontario; Bull Moose Tube Co., Chesterfield, Mo.; Southland
Tube Inc., Birmingham, Ala.; and American Tube Manufacturing
Inc., Birminghamfollowed Atlas move by announcing
their own price hikes of $50 per ton under roughly the same
terms, according to letters to customers dated Monday.
While the mills didnt give
reasons for the increases, market sources said the hikes came
in response to a recent round of coil price hikes amounting to
$50 per ton (
amm.com, Nov. 7). Many domestic HSS mills had
already boosted tags by $40 per ton ($2 per cwt) in late
October following a coil increase of the same amount (
amm.com, Oct. 26).
Market sources cited concerns
about whether coil increases were gaining traction in the
market. Current HSS prices were put in a range of $880 to $920
per ton ($44 to $46 per cwt), with lead times at mill stock to
about four weeks for most sizes.
One tube distributor said his
company was seeing better business than expected at year-end,
thanks in part to unseasonably mild weather in certain parts of
the country. There is also less uncertainty in the U.S. market
now that the presidential elections are over.
"No complaints right now. Demand
is robust. Margins are good. And people are taking advantage of
the weather to finish up projects," the distributor said. "I
just hope mills are intelligent about how they raise prices and
dont start throwing things out there just to see what
But a second distributor said
the attempt to boost tube tags was tentative, at best, given
that most flat-rolled buyers werent paying the
$50-per-ton coil increase in full, if at all.
"The HSS (mills) can do what
they want. ... But this hinges on how successful the coil
increases are," he said.
The second distributor said his
company was still expecting the traditional year-end slowdown.
Buyers are also hesitant to buy material given that HSS prices
have run up quickly in the past, only to see tags reverse
course just as quickly, he said.
"No one is buying more than they
absolutely need to. Of course, if you need material for a job
youll buy regardless of the price," he said. "But people
dont want to buy (tubing) and put it on the floor if
prices could fall back."
The second distributor also
questioned whether the mild weather would provide a significant
boost to demand.
"Last year, (unseasonably warm
weather) pulled work forward. It didnt generate new
activity. It just relocated it," he said. By the second
quarter, when demand usually picks up, it instead fell back on
a lack of new activity, he added.