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    Overseas

    January 29, 2015

    World vs. US HRC Price Spread Shrinks as US Prices Move Lower

    Written by Brett Linton

    The spread between world hot rolled export pricing and that of the domestic average here in the United States is shrinking based on our analysis of steel pricing data from this week. As the spread shrinks, the competitiveness of imported steel into the United States is reduced. Over time, if the trend continues, the domestic (U.S. and Canada) steel mills will be in a better position to regain some of the market share lost to foreign steel imports, especially on flat rolled steel products in the coming months (second half 2015).

    The following calculation is used by Steel Market Update in order to identify the spread between world hot rolled export prices as determined by SteelBenchmarker and domestic (USA) hot rolled prices. SMU compares the world hot rolled export price to which dollars are added for freight, handling, trader margin, etc. The number generated is then compared to the spot (FOB Mill) domestic hot rolled price using the SMU Hot Rolled Index average for this week, with the result being the spread between domestic and world hot rolled coil (HRC) pricing.

    Brett Linton

    Brett Linton is a digital operations analyst for Steel Market Update, where he began his career. Linton has been in the steel industry since 2010. He has held roles as a category manager and strategic insights director at Reibus before returning to SMU in 2024. He is a graduate of The University of North Georgia with a degree in Finance and Accounting. Brett can be reached at brett@steelmarketupdate.com or 724-314-0179.

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