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.
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 regions producers was in July
(amm.com, July 17). However, after initial signs it
was taking hold, prices began to backslide, eventually reaching
their pre-increase levels (amm.com, Oct. 25).
Despite the last
increases 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.