International Steel Prices

Though Down, US Sheet Prices Still Hold Premium Over HRC Imports

Written by David Schollaert

Hot-rolled coil (HRC) imports remain a feasible alternative despite repeated price decreases in the US market, according to SMU’s latest foreign vs. domestic price analysis. Domestic tags are still notably more expensive than imported product, as offshore steel prices and US prices decline in tandem.

The price advantage domestic HRC had enjoyed over imported material as recently as mid-February turned negative in a hurry as US prices climbed at a hurried pace. But now, even as domestic hot band prices have turned and are sliding quickly, declines in oversease markets have kept the spread rather wide.

US HRC was less expensive than foreign hot-rolled for 16 consecutive weeks starting in mid-Q4 2022. But that trend ended halfway through the first quarter as domestic HRC prices surged after repeated mill price hikes. The gains outpaced the rise seen for tags abroad. And while prices have been declining more aggressively stateside, prices abroad have continued to move lower as well.

Domestic hot band is now roughly 20.5% more expensive than foreign material. That premium is marginally lower than last week when domestic HRC was ~21% more costly than imported product.

US prices had been cheaper than foreign prices for the three regions we follow (Asia, Italy, and Germany) since the beginning of November after adding freight costs, trader margins, and applicable tariffs. That changed with US HRC prices jumped by more $400 per ton from early February through mid-April. But US prices have lost momentum and are now down four weeks straight.

Domestic HRC cost on average $18 per ton less than imported hot band as recently as Feb. 15. That flipped in mid-Q1, with US prices becoming $262 per ton more expensive than offshore product as recently as April 12. The premium is down now $43 per ton, as domestic prices are on average $219 per ton more expensive than imported hot band.

SMU uses the following calculation to identify the theoretical spread between foreign HRC prices (delivered to US ports) and domestic HRC prices (FOB domestic mills): Our analysis compares the SMU US HRC weekly index to the CRU HRC weekly indices for Germany, Italy, and east and southeast Asian ports. This is only a theoretical calculation because costs to import can vary greatly, influencing the true market spread.

In consideration of freight costs, handling, and trader margin, we add $90 per ton to all foreign prices to provide an approximate CIF US ports price to compare to the SMU domestic HRC price. Buyers should use our $90-per-ton figure as a benchmark and adjust up or down based on their own shipping and handling costs. If you import steel and want to share your thoughts on these costs, we welcome your insight at

Asian Hot-Rolled Coil (East and Southeast Asian Ports)

As of Thursday, May 11, the CRU Asian HRC price decreased by $27 per ton from a week ago to $535 per net ton. This was down $50 per ton from levels one month prior. Adding a 25% tariff and $90 per ton in estimated import costs, the delivered price of Asian HRC to the US is $759 per ton. The latest SMU hot-rolled average is $1,070 per ton, down $35 per ton from our previous price update last week, and also down $90 per ton compared to our price one month ago.

US-produced HRC is now theoretically $311 per ton more expensive than steel imported from Asia. Though down just roughly $1 per ton week on week (WoW), this is still a reversal from mid-February when domestic HRC had a $13-per-ton advantage over HRC from Asian markets.

Just about three months ago, Asian HRC was $76 per ton more costly than US HRC. That was among some of the widest price gaps Asian HRC had over domestic product in recent years.

ForeignVsDomestic Fig1

Italian Hot-Rolled Coil

Italian HRC prices decreased WoW by $18 per net ton to $801 per ton this week, and down $46 per ton month on month (MoM). After adding import costs, the delivered price of Italian HRC is approximately $891 per ton.

Domestic HRC is now theoretically $179 per ton more expensive than imported Italian HRC. That spread is down $17 per ton WoW and still represents a nearly $191-per-ton reversal compared to just three months ago when US HRC was $12 per ton cheaper than Italian product. As recently as Jan. 25, US HRC was in theory $52 per ton cheaper than imported Italian hot band.

ForeignVsDomestic Fig2

German Hot-Rolled Coil

CRU’s latest German HRC price slipped by $8 per ton WoW to $812 per net ton, down $34 per ton MoM. After adding import costs, the delivered price of German HRC is roughly $902 per ton.

Domestic HRC is now theoretically $168 per ton more expensive than imported German HRC. That’s down $27 per ton WoW but still a swing of $197 per ton given that German hot band was $29 per ton more costly than domestic HRC in mid-February.

US HRC has held a price advantage over German product for all but three weeks since late July.

ForeignVsDomestic Fig3

Figure 4 compares all four price indices and highlights the effective date of the tariffs. The chart on the left shows historical variation from Jan. 1, 2021, through present. The chart on the right zooms in to highlight the recent decoupling of US and offshore HRC prices.

ForeignVsDomestic Fig4

Notes: Freight is an important consideration in deciding whether to import foreign steel or buy from a domestic mill. Domestic prices are referenced as FOB the producing mill, while foreign prices are CIF the port (Houston, NOLA, Savannah, Los Angeles, Camden, etc.). Inland freight, from either a domestic mill or from the port, can dramatically impact the competitiveness of both domestic and foreign steel. It’s also important to factor in lead times. In most markets, domestic steel will deliver more quickly than foreign steel.

Effective Jan. 1, 2022, the traditional Section 232 tariff no longer applies to most imports from the European Union. it has been replaced by a tariff rate quota (TRQ). Therefore, the German and Italian price comparisons in this analysis no longer include a 25% tariff. SMU still includes the 25% Section 232 tariff on foreign prices from other countries. We do not include any antidumping (AD) or countervailing duties (CVD) in this analysis.

By David Schollaert,

David Schollaert

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