June 2009 | Welded steel tube & pipe
Mills pass on coil hikes: Americas Market Analysis
Structural tubing mills attempt to pass rising costs to their their buyers.
US structural mills wasted no time in passing on the hike in HR coil prices – unsurprising given that margins had been slashed to the bone. The initial increase was for $30/ton for Midwest prices in line with the initial move by the US mills, but the later moves by ArcelorMittal and followed by the majority of the remaining mills was an overall $60-80/ton. However, it is not clear whether this has been fully implemented, with some producers possibly willing to undercut the nominal $460/ton for HR coil offered by the major integrated steel plants.
Nevertheless, we expect tubular mills to certainly pass on the additional price hikes in August, if not for the second half of July, although we note that some consumers that ordered pipe after the initial increase are probably "price-protected". We expect that tubular mills are likely to try and pass on the...
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