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Low demand pressures W. Coast steel tubing

Keywords: Tags  steel tubing, A500 grade B hollow structural sections, HSS, imports, Marcel Van Dijk, Frank Haflich


LOS ANGELES — Prices for structural steel tubing on the West Coast are showing the effects of continuing low demand as competition among local producers intensifies.

While core sizes of A500 Grade B hollow structural sections (HSS) delivered in the Los Angeles market are reported at $960 to $980 per ton ($48 to $49 per hundredweight), market sources said an increasing amount of tubing appears to be selling in a lower range of $940 to $960 per ton ($47 to $48 per cwt).

Prices on larger rail car shipments from mills east of the Rockies are even lower, depending on order size, although some buyers pointed out that the number of multiple rail car requirements has declined from earlier levels.

“There are too many of us chasing a smaller pie,” one buyer said of the West Coast region’s construction-dependent tubing market.
Prices on the latest round of imports from the market’s most important offshore source, South Korea, haven’t yet been established.

While previous tags were reported at $770 to $790 per ton ($38.50 to $39.50 per cwt), buyers said traders have been warning about possible hikes of $40 per ton ($2 per cwt) for material arriving in May.

Some preliminary quotes on limited ranges of South Korean tubing are reported at $830 per ton ($41.50 per cwt) for May arrival, but observers pointed out that it’s not unusual for initial offers to come in higher, then drift downward if they fail to attract orders.

There was one exception to the generally lackluster picture: Demand for 8-inch-square and 10-inch-square tubing appears to have picked up. These sizes are often associated with construction of “tilt-up” buildings used in warehouses, and they could be benefiting from an upturn in this sector.

In January, Marcel Van Dijk, business development manager for the Port of Los Angeles, said that about 13 million square feet of industrial warehouse and distribution space will be built in Southern California this year, with approximately 11 million square feet slated in the inland counties of Riverside and San Bernardino ( amm.com, Jan. 30).

Van Dijk said the projects—which will be built in large part to support e-commerce and information technology businesses—would contribute to an expected 7- to 10-percent rise in steel arrivals at the port in 2013. He noted that construction of these facilities consumes not only steel long products normally associated with construction, but also flat-rolled steel, which is used for siding and roofs.

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