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HSS tags up $50/T; buyers still skeptical

Keywords: Tags  hollow structural sections, HSS, Atlas Tube, Independence Tube, Maruichi Leavitt, Welded Tube of Canada, Bull Moose Tube, Southland Tube American Tube Manufacturing

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 (, 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 shipments.

Other mills—including 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., Birmingham—followed 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 didn’t 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 (, 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 (, 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 don’t start throwing things out there just to see what sticks."

But a second distributor said the attempt to boost tube tags was tentative, at best, given that most flat-rolled buyers weren’t 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 you’ll buy regardless of the price," he said. "But people don’t 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 didn’t 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.

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