Foreign vs. Domestic HRC Price Spread Remains Stable

With an estimated $70 per ton added in order to get the steel to ports in the United States (freight, handling, and trader margin), the additional costs put the true world export price at approximately $554 per ton CIF USA Port. (Note: some have traders costs as high as $100 per ton which would reduce the spread shown by $30 per ton. This would also take the import offer numbers closer to where we are seeing them in the market at $590-$610 per ton).

The latest Steel Market Update hot rolled price average is $660 per ton, unchanged from two weeks ago and down $5 per ton from late-August. The theoretical spread between the world export price and the SMU US HRC price is $106 per ton ($176 prior to import costs), unchanged from two weeks ago and up $14 from late-August. This remains the highest price spread since mid-May 2014 when it was $114 per ton ($184 per ton prior to import costs).

The $106 spread represents a significant change from mid-March 2014 when we had a spread of $45 per ton ($115 prior to import costs). One year ago the spread was $50 per ton ($120 prior to import costs).

Below is an interactive graph which you can use to compare world export prices against the SMU domestic HRC average price. We also have included a comparison with freight and traders’ costs added which gives you a better indication of the true price spread (remember, the spread is less for those with higher cost. You should be aware that the spread can be as much as $30 per ton less than our calculation based on traders true costs). You will need to read this article on our website in order to see and interact with the graphic. If you need assistance with either logging in or navigating the website, please contact our office at 800-432-3475 or info@SteelMarketUpdate.com.

{amchart id=”130″ Domestic vs. Foreign Hot Rolled Pricing- Steel Benchmarker World China Europe}