Overseas
November 5, 2020
Foreign vs Domestic HRC Prices: Imports More Appealing
Written by Brett Linton
Steel Market Update’s latest foreign vs. domestic hot rolled steel price comparison shows that steel imports have become more enticing to U.S. buyers than in previous weeks. U.S producers appear to have lost their price advantage over HRC imports from Far East Asia, according to the latest SMU and CRU price indices. The price differentials between domestic HRC compared to foreign imports had widened through mid-August to reach record highs, but have since declined sharply as steel prices in the U.S. have risen. The latest Far East Asian HRC prices are now $4 cheaper than domestic prices after taking freight costs, trader margins and tariffs into consideration.
The following calculation is used by Steel Market Update to identify the theoretical spread between foreign hot rolled steel prices (delivered to U.S. ports) and domestic hot rolled coil prices (FOB domestic mills). This is only a “theoretical” calculation as freight costs, trader margin and other costs can fluctuate, ultimately influencing the true market spread. We are comparing the SMU U.S. hot rolled weekly index to CRU hot rolled weekly indices for Germany, Italy and Far East Asian ports.
