LOS ANGELES West Coast
structural steel tubing producers are standing by a recently
announced price hike, but most buyers believe its still
too early to judge its success.
West Coast tubing producers
began raising prices by $30 per ton ($1.50 per hundredweight)
effective with new orders placed March 11, the first increase
since last year (
amm.com, March 14). But both buyer and mill
sources continue to debate just how much resistance the
announced increase is meeting.
On paper, the hike would
nominally raise day-to-day purchase prices of core sizes of
A500 Grade B hollow structural sections (HSS) in the Los
Angeles market to $990 to $1,010 per ton ($49.50 to $50.50 per
cwt), depending on the size of the order. But larger service
centers with bigger orders to place would in many cases pay
about $20 per ton ($1 per cwt) less, with multiple truckload
orders reported at $30 to $40 per ton below the nominal
One distributor said his company
initially paid part of the hike but is now trying to decide
whether it needs to continue paying more.
"We paid half of it, but
nothings changed that shows prices are on their way up.
... We just dont know if there (are) enough orders at the
mills to make it work. It still looks like a buyers
market," the distributor said.
"If were buying material
today for a bundle or two or to fill a hold in our inventory,
well pay it," another service center buyer said of the
hike. "But if I (were) making a big order, I wouldnt
necessarily expect to pay."
As with many other downstream
steel products, most HSS market sources agree that the
hikes success or failure could hinge on two factors: the
ultimate outcome of recent hikes on hot- and cold-rolled coil
by local mills, which remains undetermined; and the volume of
tubing demand, which by some measures still hasnt shown a
"Theyre buying," one mill
source said of current demand from distributors and
fabricators. "Theyre just not buying that much."
Imports also continue to be quoted substantially below
domestic tubing prices, with the latest quotes on South Korean
tubing at $820 to $830 per ton ($41 to $41.50 per cwt). Prices
as low as $770 per ton ($38.50 per cwt) for some South Korean
material for July arrival have been reported for minimum orders
of 20 tons on one size.