Prices
June 12, 2014
World Export vs. Domestic HRC Price Spread down $8 per ton
Written by Brett Linton
World export prices for hot rolled bands was pegged at $504 per net ton ($556 per metric ton) according to data released by SteelBenchmarker earlier this week. This world hot rolled export price is up $3 per ton compared to the last set of data received about two weeks ago. With an estimated $70 per ton in freight, handling and trader margin added in order to get the steel to ports in the United States, the additional costs puts the world price at approximately $574 per ton CIF USA Port. The latest Steel Market Update hot rolled price average is $670 per ton, unchanged from the previous week but down $5 per ton from two weeks ago. The theoretical spread between the world export price and the SMU US HRC price is now $166 per ton ($96 with freight costs included), $8 per ton less than what we reported two weeks ago and $18 per ton less than 1 month ago.
The $96 spread represents a significant change from mid-March 2014 when we had a spread of $45 per ton ($115 prior to freight and other costs being added). One year ago the spread was $101 per net ton prior to freight, handling and traders margin which we calculate to average about $70 per ton. So, at this time last year, there was little incentive to buy foreign hot rolled coil.
