LOS ANGELES West Coast producers of structural steel tubing are sticking with a July price hike, even as lagging overall demand, intense competition and sharply discounted imports make a full implementation difficult.
California tubing producers last month announced $40-per-ton hikes that were due to take effect by July 12 (amm.com July 17), pushing prices for core sizes of A500 Grade B hollow structural sections in the Los Angeles market up to $980 to $1,000 per ton ($49 to $50 per hundredweight).
While few buyers reported paying the full $40, some said they were paying up to $30 per ton more on certain items and a greater number said they accepted a $20 hike.
However, these generally are for day-to-day stock orders, which in the current market are reported at a steadybut historically slowpace as the West Coast nonresidential construction market continues to struggle. Projects and other orders involving substantial tonnage are prone to intense competition and price-cutting, market sources said.
Moreover, mills in the Midwest increasingly have been sending material to the West Coast, undercutting local prices on the limited number of multi-carload orders available in the West, according to these sources. Each rail car carries approximately 90 tons of tubing.
Additionally, imports continue to play a significant role on the West Coast, with recent offers as low as $38 per cwt for shipment in October-November.
A number of buyers said that in the current unsettled market theyre not buying foreign tubing since its often difficult to get a full range of products in any order. Nevertheless, enough is coming in that distributor resale prices in many cases reflect import tags rather than domestic replacement.
"Our competitors are taking these import prices to the street," a service center executive said.