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Offer of structural shapes rattles market

Keywords: Tags  steel, structural shapes, hollow structural sections, HSS, A500 Grade B, Frank Haflich


LOS ANGELES — Six years after a controversy over Chinese structural steel tubing hit U.S. shores, market sources wonder what kind of reception an aggressively priced offer of more than 1,600 tonnes of structural shapes is receiving in three major U.S. import markets.

Hot-rolled angles priced substantially below domestic levels were first offered last month by an East Coast importer, according to sources, who said the initial shipment was due to arrive in Houston on Oct. 1 and subsequent shipments are scheduled to arrive in Long Beach, Calif., and Philadelphia in November.

For many structural buyers the country of origin is a problem. While it wasn’t identified in the offering, industry sources said they have been told the material is from China, whose reputation in structurals continues to suffer from an earlier scandal over allegedly substandard product.

Efforts to reach the reported importer for comment were unsuccessful, and it isn’t known what kind of response the offer received or if the steel actually is arriving.

In 2007, China almost overnight lost its role as the lowest-priced source of structural tubing, or hollow structural sections (HSS), in some coastal U.S. markets following allegations—reportedly originating in the domestic HSS industry—that some material didn’t meet the A500 Grade B specifications under which it was sold.

The controversy quickly spread beyond the steel industry to local television news reports, while investigations were launched and hearings held in some states and Congress about the impact of the problematic steel on public works projects (amm.com, Sept. 14, 2007).

Some large service center chains, which observers saw as the most legally vulnerable link in the supply chain, almost immediately segregated their Chinese tubing and cut off purchases.

Today, while such Chinese products as cold-rolled coil are an ongoing factor in the U.S. market, "almost everyone has ‘No Chinese’ printed somewhere on their purchase orders" from end-users of structural steel, including both private fabricators and public agencies, said a source at one distributor about the lingering impact of the 2007 scandal.

Sources said it appears that domestic mills aren’t particularly troubled by the offer, given the marketplace’s past experience with HSS. In fact, more than one observer remarked that the most frequent reaction to anyone hoping to find acceptance for a substantial amount of Chinese structurals seems to be "good luck."

The initial arrival due Oct. 1 in Houston of five sizes of 8- x 8-inch angles in 40-foot lengths ranging from ½-inch to 1-inch was priced at $44.95 per hundredweight ($899 per ton), f.o.b. loaded truck, approximately $200 per ton under the published domestic f.o.b. mill price in Houston, including freight charges, a market source said.

A shipment due to arrive in Philadelphia between Nov. 25 and 30, involving four sizes of 8- x 8-inch angles in 40-foot lengths from ½-inch to 1-inch, is priced at $45.95 cwt to $47.95 cwt ($919 to $959 per ton), while the remaining shipment due in Long Beach on Nov. 1 involves six sizes of 8- x 8-inch angles and three sizes of 5- x 3-inch angles.

In addition, for the first quarter the trader is said to be adding 8- x 6-inch and 7- x 4-inch angles, a "full range" of 1-inch through 6-inch  channels and 4-inch through 15-inch channels, with the 8-inch through 15-inch range arriving in December.

Editor's note: This story was updated Oct. 16. Due to a reporting error the difference between the price of the material that arrived in Houston Oct. 1 and the published domestic f.o.b. mill price in Houston was incorrect. The $44.95 per hundredweight f.o.b. loaded truck price for the five sizes of 8- x 8-inch angles in 40-foot lengths ranging from ½-inch to 1-inch was approximately $200 per ton under the published domestic f.o.b. mill  price in Houston, including freight charges.


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