LOS ANGELES West Coast producers of structural steel tubing continue their struggle to implement higher prices in a market that, in many cases, has splintered into two different levels.
Increases of $30 per ton that producers tried to initiate beginning March 11 (amm.com, April 1) were aimed at raising the price of core sizes of A500 Grade B hollow structural sections (HSS) in the Los Angeles market to anywhere from $980 to $1,000 per ton ($49 to $50 per hundredweight). This appears to be holding in daily purchases for spot requirements and replenishment of holes in distributor inventories.
But the spread between these day-to-day buys vs. consolidated purchases of at least a rail car (about 90 tons) appears somewhat larger than normal, reflecting a discount of $40 per ton ($2 per cwt) or more to the day-to-day purchase price, market sources said.
"The mills are all trying to support the increase," a service center buyer said. "But theyre also being very frank in letting us know that, if theres a big job, then all bets are off and theyll be aggressive."
Meanwhile, some said recent South Korean offers indicate an effort by tubing mills in that country to raise their export prices to the United States, which earlier this year had fallen below $780 per ton ($39 per cwt). But plenty of tonnage has already arrived at prices below $800 per ton ($40 per cwt), which some local sources maintain is undercutting the resale market here.
Observers point out that the uncertainty is occurring amid continuing pressure on the prices tube producers are paying for their coil feedstock, which has declined by an estimated $20 per ton in recent weeks, increasing the threat that these falling costs could reach downstream tubing prices, according to market reports.
"Its going to take at least a few weeks before we find out just where this tubing market is settling," a market source said.