Mechanical steel tubing prices continue going down

By Tom Stundza -- Purchasing, 1/2/2008 12:03:00 PM

Spot prices for mechanical steel tubing accelerated their slide in December. This has surprised some industry analysts who expected higher prices in the wake of reduced imports in the first 11 months of 2007 and proposed cost-driven price hikes by several North American mills. The tube makers have cited rising prices for key raw material, hot-rolled sheet.

However, mechanical steel tubing demand has been erratic in a downslide. That’s because square, rectangle and round mechanical steel tubing is used primarily in such metalworked-product applications and fabrications as motor vehicle parts and office furniture. Since most analysts expect continued weakness in the appliance and automotive sectors in 2008, they also say there’s little chance that demand or prices are about to escalate for mechanical tubing. And, although the weak dollar has kept foreign-made mechanical tubing away from domestic shores, there is substantial new capacity in China and India. Upshot: The world market has moved from tightness in 2006 to oversupply in 2008.