Scrap Prices North America

HRC vs. scrap spread widens but remains low

Written by Ethan Bernard

August 21, 2024

The price spread between hot-rolled coil (HRC) and prime scrap widened slightly in August but remains in low territory not seen since late 2022, according to SMU’s most recent pricing data.

SMU’s average HRC price rose this week, as did the August price for busheling scrap.

Our average HRC price was $675 per short ton (st) as of Aug. 20, up $10 from the prior week.

At the same time, busheling tags increased $20 month over month to an average of $395 per gross ton (gt) in August. Figure 1 shows price histories for each product.

After converting scrap prices to dollars per short ton for an equal comparison, the differential between HRC and busheling scrap prices was $322/st as of Aug. 21, up $17 from a month earlier (Figure 2). Even with the slight bump, the spread remains in low territory not seen since November 2022.

The chart on the right-hand side below explores this relationship differently: We have graphed HRC’s premium over busheling scrap as a percentage. HRC prices carry a 71% premium over prime scrap, flat from a month ago. As with July, that is still the lowest premium since January 2023, when it was 67%.

Here’s what some of our SMU survey participants are saying about the prime scrap situation and September outlook:

“Sideways to slightly up.”

“Could be down slightly to match iron ore market.”

“I have not heard anyone really willing to go out on a limb and predict September pricing yet.”

“With upcoming outages, they could be down.”

Note: By the way, did you know SMU’s Interactive Pricing Tool can show steel and scrap prices in dollars per short ton, dollars per metric ton, and dollars per gross ton?

Ethan Bernard

Ethan Bernard is a reporter and editor for Steel Market Update. He previously worked for American Metal Market as a copy editor in the New York office for two years starting in 2008. Later, he copy edited AMM’s monthly magazine on a freelance basis from 2015 until 2017. With experience in financial copywriting and textbook publishing, he holds a BA in Comparative Literature from UC Berkeley, and an MFA. in Creative Writing from New York University. He can be reached at ethan@steelmarketupdate.com or 724-759-7871.

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