Foreign vs Domestic HRC Prices: Imports Have the Upper Hand

Steel Market Update’s latest analysis of foreign and domestic steel prices shows a growing attraction for foreign imports across the board. After taking freight costs, trader margins and tariffs into consideration, foreign prices now hold potential discounts of 8% to 38%. The spread between domestic HRC and foreign imports has surged since late-May, reaching record highs in favor of foreign HRC producers in Far East Asia. The German and Italian HRC price attraction continues to grow over domestic prices as well, with the spreads from both regions approaching the record levels seen earlier this year. 

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 margins and other costs can fluctuate, ultimately influencing the true market spread. This compares the SMU U.S. hot rolled weekly index to CRU hot rolled weekly indices for Germany, Italy and Far East Asian ports.