Foreign vs. Domestic HRC Price Analysis: Strong Foreign Advantage

Foreign steel imports continue to entice U.S. buyers with potential discounts of 17% to 42%, according to Steel Market Update’s latest foreign versus domestic hot rolled steel price comparison. With domestic hot rolled averaging $1,950 per ton last week, foreign prices are theoretically $330 to $830 per ton cheaper than domestic prices after taking freight costs, trader margins, and tariffs into consideration. The spread between domestic and foreign prices has surged since late-May, surpassing 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.