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West Coast steel tubers hike prices

Keywords: Tags  West Coast tube producers, steel tube, price increase, Frank Haflich

LOS ANGELES — West Coast producers of structural steel tubing, after holding back while mills east of the Rockies announced two sets of price hikes, are now attempting to implement $40-per-ton increases of their own.

Increases by California mills were due to become effective between July 5 and July 12, depending on the mill, market sources told AMM, noting that announced hikes usually don’t actually begin until the last mill’s move takes place. Orders entered prior to the increase­—ranging as far as mid-August for some mills—will still be shipped at the earlier price, sources added.

The $40-per-ton increases announced across the West Coast region follow two rounds of tubular increases east of the Rockies. In early June, mills in the Midwest and South initially sought hikes of $50 per ton, which some later modified to $30 per ton (, June 5); later that month, Atlas Tube Inc. launched a second $40-per-ton increase that was quickly followed across the region (, June 27).

West Coast tubers had appeared largely reluctant to join the increases—until now.

If successful, the West Coast increase would bring prices for core sizes of A500 grade B hollow structural sections (HSS) up to a nominal range of $980 to $1,000 per ton ($49 to $50 per hundredweight).

As a result of the announcements, some market sources said they’re being quoted higher prices on orders for bundles of 4,500 to 5,000 tons or smaller, and certain mill sources said they’re adjusting previously ordered project tonnage due to be shipped after August. But other market participants maintained that, so far, they’ve seen little proof that a significant tonnage is being sold at the new price.

One indication that the market continues to contain skeptics is few reports of buyers placing orders to get ahead of the slated price hikes.

"I didn’t buy anything to anticipate an increase," a service center buyer said. "I’m just waiting this out."

The strongest argument for an eventual tubing hike is based on higher prices that tubers maintain they’re paying for their coil feedstock, which threatens to put them into a profit squeeze if tubing prices don’t increase. Still, some market sources argue that until there’s a sustained improvement in construction, a critical component of support is missing.

"It’s going to take a change in demand to back up these increases," a second service center buyer said.

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