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Costs push W. Coast tubers to raise prices

Keywords: Tags  structural steel tubing, West Coast, A500 Grade B, Frank Haflich

LOS ANGELES — West Coast producers of structural steel tubing have finally moved to boost prices due to the rising cost of coil feedstock.

West Coast tube makers—and the regional depot of at least one Midwestern mill—began telling customers last week they are raising their prices $40 per ton ($2 per hundredweight), according to market sources. The increases were effective beginning with orders ranging from Nov. 12 to Nov. 19 and include product being shipped at various dates, depending on the mill.

“I hope this is a good sign,” said one service center buyer who, like other distributors, is rooting for the first hike since mid-August to take hold (, Aug. 28).

The West Coast hike comes as mills east of the Rockies embark on their second round of increases—though the success of the initial increase is still not clear.

If fully implemented, the West Coast increase would bring the day-to-day price for truckload orders of about 20 tons for core sizes of A500 Grade B hollow structural sections in the Los Angeles market to $49 to $50 per cwt ($980 to $1,000 per ton) from a previous $47 to $48 per cwt ($940 to $960 per ton), although deals were routinely being made with larger buyers at a reported $46 per cwt ($920 per ton).

Mills in the West are generally slower to post increases than those in the East and Midwest, where attempts at higher prices tend to quickly follow price hike announcements by their coil suppliers.

But indications that Western producers’ feedstock costs are going up as recent coil price hikes take hold could stiffen the resolve of local mills to maintain higher tubing tags.

“We’re 100 percent behind this, but we’re also keeping an eye on our competitors,” one mill source said of the increase, emphasizing that while his company remains wary of price-cutting by its rivals, it won’t throw in the towel if it sees just one or two discounted deals in the marketplace.

Most sources in the region agree that the main support for any price hike has to come from the feedstock side, because few see signs of improvement in construction, the primary market for tubing.

“The glass is still half-empty” in terms of tubing demand, a market source said.

While South Korean tubing had been offered for February arrival in the vicinity of $40 per cwt ($800 per ton), market sources questioned just how many orders have been confirmed at this price, noting that in the past, confirmation has often been held back when it appeared domestic prices were rising.

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