The spread (variance) between World export prices for hot rolled coil compared to the average for hot rolled coil prices east of the Mississippi based on the Steel Market Update HRC index is shrinking.
World export hot rolled coil (HRC) price is currently $505 per net ton FOB the port of export. When freight, loading and unloading charges and a small margin for the trading company are added the landed price for foreign hot rolled coil is closer to $575 per ton.
The spread between world export prices (FOB USA Port) and the latest Steel Market Update (SMU) average HRC price of $620 per ton is $45 per ton. Two weeks ago the spread was $57 per ton. One month ago it was $75 per ton.
The spread between the world export price + freight and the SMU hot rolled coil price peaked back in late-November 2013 at $93 per ton.
Looking back to March of last year, the spread was reversed as world export HR price + freight was $3 per ton higher than the SMU HR index. As the year progressed the spread remained very close up until late-May when US hot rolled prices started to increase and the world export price flattened out or rose only modestly.
At a $45 per ton spread the incentive to purchase foreign hot rolled is reduced. However, the U.S. will see higher than normal imports of HRC and other flat rolled products due to the higher than normal spreads (exceeding $60 per ton). We anticipate imports will continue to exceed 3.0 million net tons per month until July or August 2014.
John PackardRead more from John Packard
Latest in International Steel Prices
Imported HRC Tags Climbing vs. US Product
US hot-rolled coil (HRC) continues to lose ground against imported hot band. Domestic product remains a better deal than offshore HRC as US tags sink further, according to SMU’s latest foreign vs. domestic price analysis.
US HRC Now a Better Bargain Than Imports
US hot-rolled coil (HRC) is now a better deal than imported hot band, something we haven't seen since early February, according to SMU’s latest foreign vs. domestic price analysis.
Domestic HRC Is Now Cheaper Than Imports
Domestic hot-rolled coil (HRC) is now cheaper than imported hot band as US tags have fallen further and at a faster clip than offshore product, according to SMU’s latest foreign vs. domestic price analysis.
Domestic and Imported HRC Prices Reach Parity
Domestic and imported hot-rolled coil (HRC) prices are nearly parallel as US tags continue to erode at a faster clip than offshore prices, according to SMU’s latest foreign vs. domestic price analysis.
US HRC Prices and Imports Are Nearly Even
The spread US hot-rolled coil (HRC) prices had held over offshore product for much of the year has almost evaporated, according to SMU’s latest foreign vs. domestic price analysis.