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West Coast steel tube price increase up in air

Keywords: Tags  steel, structural tubing, HSS, hollow structural sections, A500 Grade tubing, West Coast tubing, price increases, tubing prices Frank Haflich

LOS ANGELES — West Coast structural steel tubing producers are standing by a recently announced price hike, but most buyers believe it’s 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 (, 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 price.

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 nothing’s changed that shows prices are on their way up. ... We just don’t know if there (are) enough orders at the mills to make it work. It still looks like a buyer’s market," the distributor said.

"If we’re buying material today for a bundle or two or to fill a hold in our inventory, we’ll pay it," another service center buyer said of the hike. "But if I (were) making a big order, I wouldn’t necessarily expect to pay."

As with many other downstream steel products, most HSS market sources agree that the hike’s 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 hasn’t shown a significant improvement.

"They’re buying," one mill source said of current demand from distributors and fabricators. "They’re 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.

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