Steel Products Prices North America

Hot Rolled vs Prime Scrap Spread at 26-Month Low

Written by Brett Linton

The spread between hot-rolled coil (HRC) and prime scrap prices has begun to narrow again after three months of stability, according to recent Steel Market Update data.

Prices for both products continue to move lower, as they have most weeks since May. The latest HRC-prime spread is exactly one-fourth of what it was this time last year.

The 26-month low is also back in line with pre-pandemic levels.

Our hot rolled coil price average fell $25 per ton week-over-week to $630 per net ton ($31.50 per cwt) as of Nov. 15, the lowest price recorded since September 2020. HRC prices are down $100 per ton versus levels four weeks prior and have seen an overall decline of $905 per ton compared to the beginning of the year. Looking back to one year ago, when HRC prices were easing from record-high levels, the SMU index through last week is down 66%, or $1,200 per ton. Hot rolled prices have declined an average of $88 per ton per month since peaking last September.

Scrap prices settled last week, with busheling at $345 per gross ton for November. This is down $15 per ton from the month prior and down $195 per ton compared to the start of the year. Busheling prices are $430 per ton less than April’s historic high of $775 per gross ton, and down $260 per ton versus levels one year ago. Scrap prices have fallen by an average of $61 per ton per month since peaking in April. Figure 1 shows price histories for each product.

Hot rolled steel and steel scrap prices

After converting scrap prices to dollars per net ton for an equal comparison, the differential between HRC and busheling scrap prices is $322 per net ton through last week. This is the smallest spread since September 2020 (Figure 2). The HRC/scrap price spread has averaged $359 per ton over the last four weeks and $397 per ton over the past quarter. Recall that the spread between these two products had been erratic between late 2020 and mid-2022. It reached a record-high of $1,428 per ton in September 2021 and fell to an 18-month low of $375 per ton six months later. For comparison, the average spread throughout 2021 was $1,080 per ton, with 2020 averaging $310 per ton and 2019 averaging $324 per ton.

Hot rolled steel price premium over busheling scrap

PSA: Did you know our Interactive Pricing Tool has the capability to show steel and scrap prices in dollars per net ton, dollars per metric ton, and dollars per gross ton?

Figure 3 explores this relationship in a different way – we have graphed the spread between HRC and busheling scrap prices as a percentage premium over scrap prices. HRC prices now carry an 83% premium over prime scrap, right in the middle of levels seen across 2022. Over the past four weeks, the premium has averaged 92%. The month of October averaged 105%, September 92%, August 83%, and July 77%. Back in early March, the premium briefly reached a multi-year low of 43%, having fallen from a record high of 236% last October. The same month one year ago, HRC held an average premium of 203% over scrap, while November 2020 saw an average premium of 124%. HRC held the lowest premium over busheling scrap back in November 2011, when it reached 29%.

Hot rolled steel percentage premium over busheling scrap

This comparison was inspired by reader suggestions. If you would like to chime in with topics you want us to explore, reach out to our team at

By Brett Linton,

Brett Linton

Read more from Brett Linton

Latest in Steel Products Prices North America