Steel Products Prices North America
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/media/k2/items/src/5b79c92306b2d08f98fcc66401d26c62.jpg)
Hot Rolled vs Prime Scrap Price Spread Remains Low
Written by Brett Linton
December 14, 2022
The spread between hot-rolled coil (HRC) and prime scrap prices is narrowing for the second consecutive month, according to Steel Market Update data.
Prices for both products increased in December, following five consecutive months of declines. The latest HRC-prime spread is one of the lowest recorded in more than two years. The spread is now back in line with pre-pandemic levels.
Our hot rolled coil price average increased $30 per ton week-over-week to $670 per net ton ($33.50 per cwt) as of Dec. 13, the third consecutive weekly increase. HRC prices are up $40 per ton versus levels four weeks prior, but we have seen an overall decline of $865 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 this week is down 60%, or $1,000 per ton.
December scrap prices settled last week, increasing for the first time since March. Busheling prices rose $35 per gross ton month-over-month to $380 per ton. This is $160 per ton less than where prices were at the start of the year. Busheling prices are $395 per ton below April’s historic high of $775 per ton, and $240 per ton less than year-ago levels. Figure 1 shows price histories for each product.
After converting scrap prices to dollars per net ton for an equal comparison, the differential between HRC and busheling scrap prices is $331 per net ton through Dec. 10. Last week we saw a spread of $301 per ton, the smallest recorded since September 2020 (Figure 2). The HRC/scrap price spread has averaged $314 per ton over the last four weeks, $368 per ton over the past three months, and $553 per ton across 2022.
Recall that the spread between these two products had been erratic from late 2020 through mid-2022; it reached a record-high of $1,428 per ton in September 2021, and then 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.
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 a 76% premium over prime scrap, whereas 2022 YTD has averaged 94%. The month of November averaged 86%, October 105%, September 92%, and August 83%. 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 166% over scrap, while December 2020 saw an average premium of 124%. HRC held the lowest premium over busheling scrap back in November 2011, when it reached 29%.
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 News@SteelMarketUpdate.com.
By Brett Linton, Brett@SteelMarketUpdate.com
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/04/SMU_BL_headshot-V4-150x150.png)
Brett Linton
Read more from Brett LintonLatest in Steel Products Prices North America
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/07/CRU-Logo-2023-07-21-at-4.35.41-PM.png)
CRU: Longs pricing trends diverge in North, South America
Most longs prices in the US were unchanged this month, except for rebar, which declined by $1.50/cwt ($30/short ton) m/m. While end-use demand is stable, inventories are well-stocked, keeping purchases limited. Domestic availability is sufficient to meet current demand, hindering the appetite for imported material. Meanwhile, prices for scrap remained under pressure in June, with […]
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Nucor.png)
Nucor cuts plate prices by $125/ton, cites ongoing competition
Nucor Corp. announced that its plate mill group would cut prices for as-rolled, discrete, and normalized plate with the opening of its August order book.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Nucor.png)
Nucor cuts HR price for fourth straight week
Nucor lowered its consumer spot price (CSP) for hot-rolled (HR) coil by another $10 per short ton (st) for the first week of July. The steelmaker said in a letter to customers on Monday that its CSP base price for the week will be $670/st for all of its sheet mills with the exception of California Steel Industries (CSI).
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Cliffs_logo2.2.png)
Cliffs sets $720/ton HR price with opening of August books
Cleveland-Cliffs on Tuesday announced its monthly hot-rolled (HR) coil price of $720 per short ton (st) with the official opening of its August order book. The rate is down from last month’s price of $800/st.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/07/CRU-Logo-2023-07-21-at-4.35.41-PM.png)
CRU: Demand weakness continues to weigh on global sheet markets
Demand has remained persistently weak across the globe for sheet steel, weighing on prices. US HR coil prices fell the furthest this week as high-volume, low-priced deals were transacted as mills looked to fill order books and competed with one another amid relative demand weakness. Meanwhile, European prices were also down due to low demand […]