International Steel Prices

US Premium Over Foreign HRC Remains Unchanged

Written by David Schollaert

The US hot-rolled coil (HRC) premium over offshore product has changed little over the past few weeks, as both prices abroad and stateside have inched up in tandem recently, according to SMU’s latest foreign vs. domestic price analysis.

HRC tags stateside are still down $280 per ton since peaking at $1,160 per ton back in mid-April, though they have inched up modestly over the past two weeks. A similar trend has been seen on imports, keeping discounts of foreign HRC over US product largely unchanged and at its lowest level since March 1.

During the downward cycle at the end of 2022, domestic HRC held a price advantage over imported material for about four months. Repeated mill price hikes to kick off the year, ballooned the US premium over offshore hot band by more than $260 per ton.

Domestic hot band is now roughly 14.2% more expensive than foreign material, unchanged week-on-week, and down from 18.7% a month ago. While it’s unclear if domestic mills will be successful in their latest efforts to increase prices, margins between domestic product and offshore hot band could fluctuate more through seasonally slower summer months.

SMU uses the following calculation to identify this 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, July 13, the CRU Asian HRC price was $522 per ton, down $4 per ton vs. the prior week, but unchanged from levels one month ago. Adding a 25% tariff and $90 per ton in estimated import costs, the delivered price of Asian HRC to the US is approximately $742 per ton. The latest SMU hot-rolled average is $890 per ton, up $10 per ton week-on-week (WoW), but down $50 per ton compared to our price one month ago.

US-produced HRC is now theoretically $148 per ton more expensive than steel imported from Asia. That figure is up $16 per ton WoW. This is still a reversal from mid-February when domestic HRC had a $13-per-ton advantage over HRC from Asian markets.

ForeignVsDomestic Fig1

Italian Hot-Rolled Coil

Italian HRC prices also moved up WoW, $12 per ton higher to $666 per ton this week, and up $15 per ton from a month ago. After adding import costs, the delivered price of Italian HRC is approximately $756 per ton.

Domestic HRC is now theoretically $134 per ton more expensive than imported Italian HRC. That spread is down $2 per ton WoW but still represents nearly a $146-per-ton reversal compared to just four months ago when US HRC was $12 per ton cheaper than Italian hot band.

ForeignVsDomestic Fig2

German Hot-Rolled Coil

CRU’s latest German HRC price increased by $6 per ton WoW to $677 per ton, but still down $20 per ton from a month ago. After adding import costs, the delivered price of German HRC is roughly $767 per ton.

Domestic HRC is now theoretically $123 per ton more expensive than imported German HRC. That’s up $4 per ton WoW, and a swing of $152 per ton given that German hot band was $29 per ton more costly than domestic HRC mid-February.

ForeignVsDomestic Fig3

Figure 4 compares all four price indices. The chart on the right zooms in to highlight this year’s 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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