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    Overseas

    May 28, 2015

    Analysis of World Export vs. Domestic Hot Rolled Coil Price Spread

    Written by Brett Linton

    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 (US) hot rolled prices determined by SMU. Steel Market Update 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 prices. This is a ‘theoretical’ calculation as freight costs, trader margin and other costs can fluctuate.

    This theoretical price spread analysis is based on our review of world export prices and the hot rolled steel price index produced by SMU earlier this week. As the spread narrows, the competitiveness of imported steel into the United States is reduced. If it widens then foreign steel becomes more attractive to U.S. flat rolled steel buyers.

    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.

    Read more from Brett Linton

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