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W. Coast steel tube mills move to raise prices

Keywords: Tags  steel, structural tubing, hollow structural sections, HSS, West Coast, price increases, Searing Industries, Vest Maruichi American

LOS ANGELES — West Coast producers of structural steel tubing have joined the move to raise prices, posting an initial $40 per ton increase ahead of what many believe is an upcoming second round of increases from mills east of the Rockies.

Most California producers of hollow structural sections (HSS) have announced price increases due to take effect with new orders at various points this week, according to market sources, including Maruichi American Corp., Santa Fe Springs, Calif.; Vest Inc., Los Angeles; Searing Industries Inc., Rancho Cucamonga, Calif.; and Hannibal Industries Inc., Santa Fe Springs. In addition, Lindon, Utah-based American Tubular Products earlier raised its price, also by $40 per ton.

These follow earlier $40-per-ton increase announcements by mills in the Midwest and South, which a number of market sources believe are soon to be followed by further increases.

The increase would bring truckload prices to distributors for core sizes of A500 Grade B HSS in the Los Angeles market up from what was previously estimated at a range of $930 to $950 per ton ($46.50 to $47.50 per hundredweight).

The last industrywide increase by this region’s producers was in July (, July 17). However, after initial signs it was taking hold, prices began to backslide, eventually reaching their pre-increase levels (, Oct. 25).

Despite the last increase’s disappointing results, several market sources believe the latest West Coast increase stands a good chance, even though they concede that some tonnage may have been sold this week closer to the earlier, lower level.

"Right now, some people are showing flexibility," an industry source said. "This time of year is not the best time to raise prices, and not too many people are buying." However, others think it is better to increase tags when business is relatively slow, as it is today, as opposed to a market where mills are scrambling to land orders for large tonnages and more prone to price-cutting.

The biggest challenge to maintaining the increase is seen as imports, particularly from South Korea, where the latest prices for arrival in late January or early February are reported at $37.50 to $38.50 per cwt. However, some observers believe local tubers, resigned to the futility of competing head-on with Korean tubing on a pricing basis, see little alternative to raising tags in the face of rising coil costs.

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