NEW YORK Several domestic mills efforts to raise hollow structural sections (HSS) by $50 per ton have gotten off to a rocky start, with at least two other U.S. mills following with price hikes of just $30 per ton.
"If theres already a break in the dike at this point, that portends whats going to happen," one Mid-Atlantic service center source said, adding that only a severe cut in flat-rolled capacity would allow mills HSS increases to be successful.
A second Mid-Atlantic distributor was also skeptical of the $50-per-ton hike, but expects that at least a portion of the increase could hold.
"This ($50-per-ton hike) wont stick; they may get some of it, but not $50. I doubt coil people are collecting their full $50(-per-ton increase)," he said.
Atlas Tube Inc., a subsidiary of Chicago-based JMC Steel Group Inc., kicked off the $50-per-ton hike in response to a flat-rolled steel price increase. At least six mills followed the move June 4 (amm.com, June 4).
However, Hanna Steel Corp., Hoover, Ala., and Southland Tube Inc., Birmingham, Ala., raised prices by just $30 per ton June 5.
"Theyre probably thinking thats all flat-rolled went up," one mill source said.
Other market participants agreed that a $30-per-ton move seemed more realistic given market conditions.
Southlands increase was "based upon a thorough evaluation of the strengthening hot-rolled coil market," it said in its June 5 letter, but noted that customers "will be advised accordingly" in the event that "additional increases become necessary."
Atlas also led a $50-per-ton HSS hike in early March. While initially followed by Southland, the company later revised that down to $30 per ton (amm.com, March 8).
Since then, that increase has largely disappeared from the market (amm.com, May 28), with HSS tags now at around $900 per ton ($45 per hundredweight).
The attempted hike come after most large flat-rolled steelmakers recently raised prices by $50 per ton ($2.50 per cwt) or set higher minimum base prices (amm.com, May 23).
AMMs hot-rolled sheet prices increased $20 per ton ($1 per cwt) the week following the hikes (amm.com, May 30).