NEW YORK Whether recent
hollow structural sections (HSS) price hikes will hold depends
on the success of earlier flat-rolled steel increases, as there
hasnt been a noticeable pickup in demand, market sources
"Its not bad; its
just not great," one mill source said of current demand, adding
that the flat-rolled increases were the main reason for the
"We need it with the flat-rolled
going up," he added.
"Theyre doing that because
it lets them negotiate off a higher base," a trader said of the
hikes. "But whether it really makes a difference in what the
customer pays, in the transaction prices, that remains to be
Atlas Tube Inc., a subsidiary of
Chicago-based JMC Steel Group Inc., started the latest round of
price increases with a $50-per-ton hike on HSS (
amm.com, March 5). It was followed by American
Tube Manufacturing Inc., Birmingham, Ala.; Southland Tube Inc.,
Birmingham, Ala.; Welded Tube of Canada Ltd., Concord, Ontario;
Maruichi Leavitt Pipe & Tube LLC, Chicago; and Nova Tube
Inc., Montreal, which announced hikes under roughly the same
amm.com, March 6).
Some were skeptical that the
flat-rolled increases, and subsequently the HSS hike, would
hold in full.
"I think the flat-rolled guys
based this increase on their need to put a floor under eroding
pricing, and its not based on any increased demand, which
is OK," a Mid-Atlantic distributor source said. "But a
flat-rolled price increase without demand and without a raw
material increase behind it usually doesnt stick and
eventually will fall back."
However, any rise in scrap
prices this month could buoy the hikes, the source added.
Early indications for bellwether
markets in the Midwest were that prices might rise $30 to $40
per gross ton from the previous month, although little has been
amm.com, March 5).
"Scrap seems to be wavering. If
it only goes up $20, then from the $50 they might get $20," a
distributor source in the Midwest said of scraps
potential impact on the flat-rolled hikes.
There has been some indication
of a pickup in residential construction recently, which might
bode well for HSS demand later in the year.
"Were going into the
springtime, and housing is obviously quite a bit better," the
trader said. "When housing picks up, nonres(idential
construction) picks up six to nine months later than that.
Thats where HSS goes. Were not quite there