The period of weak demand has intensified the rivalry between the two largest tubing producers: Altas Tube and Nucor Tubular. Both mills' sales teams reportedly have been trying to learn their competitor's latest quotes, then match or beat those offers, according to market participants.
Fastmarkets AMM's weekly pricing assessment for US domestic A500 hollow structural sections fell to a new range of $1,020-1,040 per short ton ($51-52 per hundredweight) fob mill on Thursday January 17, from the previous range of $1,040-1,085 per ton ($52-54.25 per cwt).
Structural tubing prices have trended lower over the past five months, logging 13 declines and no increases since mid-August 2018.
"It's going down every day because flat roll is going down so far, so fast," a mill source said. "Customers are on the sidelines. The mills thought [customers] were going to go gonzo [buying up material] in January, but they aren't... The mills are starting with order books that aren't where they should be."
As of January 17, Fastmarkets AMM's daily hot-rolled coil index has settled below the $35-per-cwt ($700-per-ton) threshold every day since January 11 - the index's lowest level since January 2018. The index weakened to $34.58 per cwt ($691.60 per ton) on Thursday, up just 1.8% from $33.98 per cwt ($679.60 per ton) one year earlier.
An East Coast distributor confirmed that tube buyers continue to be patient, preferring to avoid taking on stock that their customers don't need in the near term.
"It's coil, and the service centers are still holding back," the East Coast distributor said. "[When] they see coil go down, they know there needs to be another reduction on the tubing [price]."
Smaller mills reportedly have grown frustrated with the clash between Atlas and Nucor, two mill sources - who do not work for either of the two largest providers - told Fastmarkets. And domestic mills seem willing to discuss even deeper discounting for orders of more than 100 tons.
"It's the hot-roll price and the competition," a West Coast distributor said. "Everyone is playing it close to the vest and being very conservative because anything associated with hot-rolled coil right now is going to see some price reductions."
Still, there has been some talk of a potential price increase announcement from steelmakers to stem the coil declines. A price bottom may finally reveal itself within a month, according to some market participants.
"HRC is still plagued by short lead times and good availability on the spot [market]," a southern distributor said. "Demand is strong for us... Don’t be surprised if the mills gain momentum 30 days from now."
Muyao Shen in New York contributed to this report.
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