International Steel Prices

Latest Spread Between Foreign and Domestic HRC Pricing

Written by Brett Linton

The following is a “hypothetical” calculation of the spread between world hot rolled export prices and domestic (USA) hot rolled prices. SMU compares the world hot rolled export price with hypothetical adders for freight, handling, trader margin, etc. This is then compared to the spot (FOB Mill) domestic hot rolled price using the SMU Hot Rolled Index average for this week.

The world export price for hot rolled bands is at $475 per net ton ($524 per metric ton) FOB the port of export according to data released by SteelBenchmarker on Monday this week. This is down $8 from the price released two weeks ago and down $9 from the mid-October price.

SMU uses a range of $70 to as much as $100 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 HR export price at approximately $545 to $575 per ton CIF USA Port. (Note that we were previously using $70 per ton to calculate the “true” world HR export price, but have since moved to a range of $70 to $100 per ton in order to provide a better estimation for our readers. This is because there can be a large range of freight charges moving steel from Europe or South America vs. Asia).

The most recent HRC foreign offers into the port of Houston are at the higher end of the range shared above at $570-$590 per ton, CIF, Duty Paid, the Port of Houston.

The latest Steel Market Update hot rolled price average is $640 per ton for domestic steel, this is up $10 from two weeks ago and down $10 per ton from mid-October. The theoretical spread between the world HR export price and the SMU HR price is $65 to $95 per ton ($165 prior to import costs), up $17 per ton from two weeks ago and down $2 from mid-October. We expect this spread to lessen as we are picking up HRC numbers moving down to $610 per ton or slightly below the $620 low end of our range. We anticipate adjusting our hot rolled numbers within the next 24 hours.

Although up over the previous analysis, the $65 to $95 spread is still on the low side compared to the spread through the summer months. The lowest spread seen this year was in late-March when we had a spread of $31 to $61 per ton ($131 prior to import costs). Over the summer we reached a spread of $84 to $114 per ton ($184 prior to import costs) in mid-May. One year ago the spread was $60 to $90 per ton ($160 prior to import costs).

Freight is an important part of the final determination as to whether to import foreign steel or buy from a domestic mill supplier. Domestic prices are referenced as FOB the producing mill while foreign prices are FOB the Port (Houston, NOLA, Savannah, Los Angeles, Camden, etc.).

Below is an interactive graph which you can use to compare world HR export prices against the SMU domestic HR 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. 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

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

Brett Linton

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