Update on Foreign vs. Domestic Hot Rolled Steel Prices

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 months, according to the latest SMU and CRU price indices. In our previous update in early November, U.S. producers had lost their price advantage over HRC imports from Far East Asia. Foreign and domestic prices have risen at a relatively similar rate since then, meaning the price spreads are within $4 of what was previously published. Recall that 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 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.