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Recent HSS increases unlikely to stick: buyers

Keywords: Tags  HSS, hollow structural sections, flat-rolled, Thorsten Schier


NEW YORK — The fate of recently launched price increases on hollow structural sections (HSS) is in doubt as market sources have yet to see any increases in purchasing prices.

"It’s not looking good at this point. They’re still trying to hold on to $30(-per-ton increases), but I think the jury’s out on that one," a Midwest distributor source said, adding that his buying prices had not gone up since the hikes were launched.

A $50-per-ton ($2.50-per-hundredweight) increase on HSS was started by Atlas Tube Inc. in early March (amm.com, March 5) and followed by most domestic mills before being partially rescinded to $30 per ton ($1.50 per cwt) by some mills a few days later (amm.com, March 8).

AMM’s benchmark price for HSS is $910 per ton, and sources said purchases around that number were still possible.

"There’s still not enough demand for a mill to say, ‘There’s a backlog; we’re going to raise prices,’" a Mid-Atlantic distributor source said, adding that a pickup was unlikely in the near term. "It’s April. The stocking season is over."

U.S. distributor shipments of pipe and tube products totaled 219,800 tons in February, down 6.6 percent from the same month last year, according to the latest Metals Service Center Institute (MSCI) figures. Canadian shipments of the product declined 19.3 percent to 50,800 tons in the same comparison.

Year-to-date shipments of 461,200 tons by U.S. distributors were 3.6 percent lower than in the first two months of last year, while Canadian shipments were 13.7 percent lower at 104,600 tons, according to MSCI data.

Further casting doubt on the HSS hikes is skepticism about the success of recent flat-rolled steel increases, as scrap might soften again in April after rising in March (amm.com, March 14).

"Although scrap went up in Chicago, there are some signs that the export market is down and scrap may soften again," the Midwest distributor source said.

The flat-rolled increases were widely cited as the reason behind the HSS hikes.

"The structural tube market and manufacturers jump on whatever increase is announced in the flat-rolled market," the Midwest source said.

AMM’s price for hot-rolled sheet has been steady at $620 per ton ($31 per cwt) since mid-February, with the latest round of flat-rolled increases announced late in the month (amm.com, Feb. 27).


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