US HRC holds $250/ton premium over imports

US hot-rolled coil (HRC) prices moved up again this week and remain significantly more expensive than offshore product. Imported hot bands have also seen repeated price increases, but the gains remain far behind those for domestic material.

All told, US HRC prices are still roughly 25% more expensive than imports, a premium that is down only slightly from our last analysis in late December.

US HRC tags are now $1,045 per ton on average based on SMU’s latest check of the market on Tuesday, Jan. 2. That’s up $5 per ton from the week before, and up $400 per ton from the lowest point of 2023, $645 per ton in late September – a time when domestic prices were cheaper than offshore tags.


This is how SMU calculates the theoretical spread between domestic HRC prices (FOB domestic mills) and foreign HRC prices (delivered to US ports): We compare SMU’s US HRC weekly index to the CRU HRC weekly indices for Germany, Italy, and East and Southeast Asian ports. This is only a theoretical calculation. Import costs can vary greatly, influencing the true market spread.

We add $90 per ton to all foreign prices as a rough means of accounting for freight costs, handling, and trader margin. This gives us an approximate CIF US ports price to compare to the SMU domestic HRC price. Buyers should use our $90-per-ton figure as a benchmark and adjust up or down based on their own shipping and handling costs. If you import steel and want to share your thoughts on these costs, please get in touch with the author at

Asian HRC (East and Southeast Asian ports)

As of Thursday, Jan. 4, the CRU Asian HRC price was $553 per ton, up $9 per ton from the previous week. Adding a 25% tariff and $90 per ton in estimated import costs, the delivered price of Asian HRC to the US is approximately $782 per ton. The latest SMU hot rolled average for domestic material is $1,045 per ton.

The result: US-produced HRC is theoretically $263 per ton more expensive than steel imported from Asia. The spread is down just $19 per ton from a seven-month high in late December.

Italian HRC

Italian HRC prices were up $3 per ton to roughly $682 per ton this week. With the marginal gain, Italian prices are up just $33 per ton over the past month vs. the $25-per-ton increases in the US. After adding import costs, the delivered price of Italian HRC is in theory $772 per ton.

That means domestic HRC is theoretically $273 per ton more expensive than HRC imported from Italy. The spread is up from $271 per ton the week prior and represents a $320-per-ton swing from late September, when US HRC prices were $47 per ton cheaper than those for Italian hot band.

German HRC

CRU’s German HRC prices increased by just $2 per ton week over week to $715 per ton. After adding import costs, the delivered price of German HRC is in theory $805 per ton.

The result: Domestic HRC is theoretically $240 per ton more expensive than HRC imported from Germany and is just $25 per ton below 2023’s widest spread of $265 per ton reached in mid-December.

Figure 4 compares all four price indices. The chart on the right zooms in to highlight the difference in pricing from the second quarter of 2023 to the present.

Notes: Freight is important in deciding whether to import foreign steel or buy from a domestic mill. Domestic prices are referenced as FOB the producing mill, while foreign prices are CIF the port (Houston, NOLA, Savannah, Los Angeles, Camden, etc.). Inland freight, from either a domestic mill or from the port, can dramatically impact the competitiveness of both domestic and foreign steel. It’s also important to factor in lead times. In most markets, domestic steel will deliver more quickly than foreign steel.

Effective Jan. 1, 2022, Section 232 tariffs no longer applied to most imports from the European Union. It has been replaced by a tariff rate quota (TRQ). Therefore, the German and Italian price comparisons in this analysis no longer include a 25% tariff. SMU still includes the 25% Section 232 tariff on prices from other countries. We do not include any antidumping (AD) or countervailing duties (CVD) in this analysis.

Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button