LOS ANGELES West Coast prices for structural steel tubing are holding steady, although the years first green shoots of optimism have emerged.
While prices havent risen for the past two months, neither have they declined, which in the past few years has been the usual outlook once tags flatten out. Few market sources expect the recent $50-per-ton price hike by Chesterfield, Mo.-based Bull Moose Tube Co. (amm.com, Jan. 29), which operates a warehouse in Arizona, to have an immediate impact on the West Coast market.
Core sizes of A500 Grade B hollow structural sections delivered in the Los Angeles market are said to be holding at $960 to $980 per ton ($48 to $49 per hundredweight), but are at least $1 per cwt less for larger purchases involving multiple truckloads of about 20 tons each.
Moreover, some market sources now believe that an apparent pickup in construction activity could spur demand by the second quarter.
"Were optimistic," one distributor, who has tentatively started to build inventory, said. "Were starting to gain a little traction."
However, it would be easy to overstate this optimism, since most market sources said that there has been little in terms of business to get excited about so far this year. Inventories held by service centers, the regions largest group of tubing buyers, are "unbelievably low," one observer said.
Mills, on the other hand, are said to be holding substantial levels of floor stock, as distributors in particular use them to shoulder their inventory risk.
"Youre not going to get the order unless you have the full range of sizes on the floor," one mill executive said of service center business.
Prices for importsparticularly from the West Coasts main offshore source, South Korearemain substantially below domestic tubing levels and declined slightly from December. Import prices are now reported as low as $38.50 per cwt on the most common sizes for expected arrival in late March or April. But some buyers said they havent been able to buy a full range of material outside these basic sizes, which could indicate that the level of demand isnt supporting export rollings by South Korean mills in these less-common sizes.