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Mechanical tubing has been at its lowest point in years, but some signs indicate the market could be ready for a rebound.

While it has been somewhat softer over the past year, there is some hope that both mechanical tubing demand and pricing should see gradual improvement starting in the second half of this year. 

Given the mechanical tubing market is quite diverse, incorporating many different types of tubing and tubing end-use markets, it is hard to generalize about the state and likely future state of the sector. Still, Damon Gaynor, co-president of Industrial Tube and Steel, says that, in addition to being down year on year, overall the current U.S. mechanical tubing demand is probably the lowest it has been since 2020. 

Cary Hart, PTC’s president and CEO, notes that mechanical tubing includes electric resistance welded tube, seamless tube, cold-drawn welded and seamless tube, structural tube and precision welded and precision cold-drawn tube, each of which serve different end-use markets. 

Rick Preckel, a partner at Preston Pipe, says one reason why the mechanical tubing market has been so weak is because its primary driver – although not its only driver – is manufacturing and U.S. manufacturing activity has been struggling over the past few years. 

He points out the Institute for Supply Management’s Purchasing Managers Index has been contractionary virtually every month over the past two years, though it did rebound to 50.9 percent in January. Additionally, he notes that in November U.S. durable goods production was down 2.2 percent year on year. Preckel says one reason for that is a number of extraordinary events had produced a muted effect on traditional market dynamics. 

Hart says overall mechanical tube demand is down by a double-digit rate year over year, with their use in consumer goods particularly weak. That, he says, is partly because of how many lawn and garden and turf care products consumers bought during COVID, but also because of the massive inflation that followed in the wake of the pandemic. As a result, dealer inventories of small- and medium-sized tractors and other lawn and garden equipment are currently very high. 

Drew Gross, president and COO of Alliance Tubular, the new structural and mechanical tube division of Alliance Steel, says the overall recent soft mechanical tubing demand resembles a hangover after a really good party. He notes there had been pretty robust demand in 2021 through early 2023 before things “got stuck in the mud” due to the higher interest rates, lower consumer confidence and higher dealer and distributor inventories. 

Kim Leppold, head of research at Fastmarkets, says mechanical tubing tends to be a catchall for a lot of categories, with additional use in construction and energy applications. Gross says those sectors, as well as the auto market, are holding up somewhat better than many traditional mechanical tube-consuming markets, especially those that involve discretionary spending. 

Leppold says the energy market has been one of the stronger, more stable uses for mechanical tubing over the past year – for renewable energy applications as well as for oilfield equipment and liquified natural gas facilities. In fact, Preckel says one of the strongest growth segments overall for mechanical tube is for the torque tubes, braces and other components for solar farm installations. 

While there has long been a lot of demand for mechanical tubing for renewables in general, which also includes wind power, demand for tubing in solar applications has been particularly strong, says Keith Chrise, vice president of sales and marketing for Lock Joint Tube. It has increased by about 40-plus percent over the last several years, helped by the Biden administration’s focus upon green, renewable energy. 

“Mechanical tubes also saw demand from the renewable energy sector,” Chrise says, “but the solar tax credits and other incentives in the Inflation Reduction Act pushed that demand to an unparalleled level.” 
Leppold says the same could be said for the Infrastructure Investment and Jobs Act and that, even though the new administration will not likely be as supportive of renewables, projects for which money has already been allocated could continue to go through. 

As far as for mechanical tube’s use in traditional downhole energy applications, she says it has been fairly steady, much like the drill rig count. However, given the fact that Trump is supportive of oil and gas drilling and could make regulatory changes to make the permitting process easier, that could create a more supportive environment for drilling-related mechanical tube demand. Of course, demand will also hinge on oil and gas pricing. 

Meanwhile tube demand for autos and other transportation equipment has been somewhat mixed, PTC’s Hart says. While consumer demand for small passenger cars continues to be good, sales of light trucks, such as pickups and sport utility vehicles, have declined over the past year or so. That’s resulted in a big jump in auto dealer inventories, particularly for some large pickup trucks and SUVs – the vehicles that use more and larger tubing.  At the same time, about half the amount of heavy trucks and trailers are being produced. 

Also, Hart notes that if under the Trump administration there is a reversal from EVs back to internal combustion engine vehicles, that could be positive as ICE vehicles tend to use more mechanical tube than EVs, particularly in their transmissions, camshafts and drive shafts. 

But in some cases it could be more of a shift in how the tubing is used, Chrise said, given that mechanical tubing is used for EV battery casings as well as for some other uses common for both EV and ICE vehicles like suspensions and other structural components. Preckel says overall automotive-related mechanical tubing demand is down about 3.5 percent year on year. 

Another somewhat soft mechanical tube end market is heavy equipment, such as agricultural and construction machines. Gaynor says the weakness in the agricultural equipment market has a lot to do with falling crop prices, as farmers don’t have the money to reinvest in new equipment, especially with the high interest rates. Similarly, construction equipment demand has been flat to down given the somewhat stagnant activity in many construction sectors. 

Hart adds that certain equipment OEMs such as Caterpillar and Deere have stopped making – or have announced the closure of facilities currently producing – hydraulic cylinders in the U.S. But he says that could change if under Trump those components won’t be able to be imported into the U.S. without a tariff. 

With the amount of hybrid or remote work being done since the pandemic, there hasn’t been much need for new office furniture, Chrise says. With more workers returning to the office, a push accelerated by the new administration’s recent edict, that could spark some greater activity there.  “We might see some more growth by the second half of this year, but I’m not sure at what rate.”

There is a heavy dose of optimism that conditions will get better in 2025, Gaynor says, although that hasn’t happened quite yet. “But since we have been flat at a low level for so long, the market has nowhere to go but up. Sooner or later, the floodgates have to open.”  

Gross agrees, stating that there is a consensus that the new Trump administration will have a positive effect upon manufacturing activity. At the same time, while they haven’t moved the needle yet, some of the legislation passed during the Biden administration will eventually be impactful – once the funding for proposed projects actually gets released. 

However, he says that perhaps the impact will come should import tariffs be placed on certain mechanical tube-containing finished and semifinished goods that are currently exempt from existing tariffs. 

While that could be positive for domestic mechanical tube producers, Hart says some companies are concerned they won’t be able to get some of the foreign products they get now or that they will have to pay more for them. 

It isn’t that mechanical tube is in short supply. In fact, Preston’s Preckel points out that it is a market that has long been oversupplied and continues to be so, at least when you look at the production capacity. However, generally companies just produce as much as they need to meet their customers’ needs.

Leppold says one reason why the tariffs could be a concern is that while there is plenty of supply – even oversupply – of mechanical tube, that is only the case when you include imports. She maintains there actually isn’t that much mechanical tube produced domestically, particularly seamless mechanical tube. Consequently, the market relies on imports. 

On the other hand, domestic mills have been cutting back their production rates and even rationalizing some production capacity, given that there continues to be more imports coming into the U.S. – not just of mechanical tube itself, but for products made from mechanical tube. 

Chrise says currently domestic lead times are the shortest that they have been for years – falling to about two to six weeks from eight to 12 weeks or even longer, with more production capacity coming online. This, he says, has made distributors feel less pressured to hold high inventory levels and are instead being more strategic about their purchases. 

Late last year, import offers had increased with international companies trying to ship as much of their products to the U.S. before the expected new tariffs were enacted, driving down domestic prices. With that, the gap between domestic and import prices should soon start to narrow. 

“Prices of raw materials, such as hot-roll and scrap, and those of downstream products like mechanical tubing, tend to go hand in hand,” Leppold points out, adding that while prices have been somewhat volatile, they may be normalizing. 

But even though it is believed that mechanical tube prices are now starting to bottom out, Hart says no one is stocking up. “They are waiting to see what will happen during the first quarter.” 

After a down year in 2024, the mechanical tubing market should see at least a gradual improvement this year, with its end-use markets benefiting from more business investments, lower interest rates, a better regulatory environment and increased optimism about the U.S. economy. “That, however, is assuming that its demand improves and inflation doesn’t get crazy,” Preckel says.

Gaynor agrees, noting that there is a healthy dose of optimism that U.S. manufacturing will improve. Because of that, Gross believes that the mechanical tube market will remain fairly strong over the next decade.

[Caption:]
New tariffs could shift the market dynamics for mechanical tubing.  (Photo courtesy Industrial Tube & Steel)