International Steel Prices
US HR prices remain marginally above offshore tags
Written by David Schollaert
September 12, 2024
US hot-rolled (HR) coil prices edged down slightly this past week but remain at a slight premium to offshore material on a landed basis.
Since reaching parity in late August, domestic prices pulled a bit ahead of imports. The premium, however, has changed little these past few weeks. The trend comes even as US mills have tried to move stateside tags higher. But both US and offshore prices have ticked lower over the past two weeks as demand hasn’t supported higher tags.
SMU’s check of the market on Tuesday, Sept. 10, put domestic HR tags at $685 per short ton (st) on average, down $5/st from last week. Stateside hot band has now slipped $15/st over the past two weeks after rallying by $65/st from July’s 20-month low.
Domestic HR is now theoretically 2.8% more expensive than imported material. US prices were 2% more expensive last week but nearly 12% cheaper just six weeks ago.
In dollar-per-ton terms, US HR is now, on average, $19/st more expensive than offshore product (see Figure 1), compared to $14/st more expensive on average last week. This is a $91/st shift from less than two months ago when US tags were roughly $72/st cheaper than offshore material.
The charts below compare HR prices in the US, Germany, Italy, and Asia. The left-hand side highlights prices over the last two years. The right-hand side zooms in to show more recent trends.
Methodology
This is how SMU calculates the theoretical spread between domestic HR coil prices (FOB domestic mills) and foreign HR coil prices (delivered to US ports): We compare SMU’s US HR coil weekly index to the CRU HR coil weekly indices for Germany, Italy, and East and Southeast Asian ports. This is only a theoretical calculation. Import costs can vary greatly, influencing the true market spread.
We add $90/st to all foreign prices as a rough means of accounting for freight costs, handling, and trader margin. This gives us an approximate CIF US ports price to compare to the SMU domestic HR coil price. Buyers should use our $90/st 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, please get in touch with the author at david@steelmarketupdate.com.
Asian HRC (East and Southeast Asian ports)
As of Thursday, Sept. 12, the CRU Asian HRC price was $425/st, down $10/st vs. the week prior. Adding a 25% tariff and $90/st in estimated import costs, the delivered price of Asian HRC to the US is approximately $621/st. As noted above, the latest SMU US HR price is $685/st on average.
The result: US-produced HRC is theoretically $64/st more expensive than steel imported from Asia. That’s up $8/st vs. last week as prices in Asia were down at a slightly sharper clip compared to US prices. Still, its a far cry from late December when US HR was $281/st more expensive than Asian product.
Italian HRC
Italian HR coil prices were down $9/st to $585/st this week. After adding import costs, the delivered price of Italian HR coil is, in theory, $675/st.
That means domestic HR coil is theoretically $10/st more expensive than imports from Italy. That’s up $4/st from last week. Just five months ago, US HR was $297/st more expensive than Italian hot band.
German HRC
CRU’s German HR price moved to $611/st, which is $10/st lower than last week. After adding import costs, the delivered price of German HR coil is, in theory, $701/st.
The result: Domestic HR is theoretically $16/st cheaper than coil imported from Germany, down from a $21/st discount last week. At points in 2023, in contrast, US HR was as much as $265/st more expensive than imported German hot band.
Notes: Freight is important when 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, Section 232 tariffs no longer apply 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 prices from other countries. We do not include any antidumping (AD) or countervailing duties (CVD) in this analysis.
David Schollaert
Read more from David SchollaertLatest in International Steel Prices
US CR prices move up while import prices mixed
The price gap between US-produced cold-rolled (CR) coil and offshore products narrowed slightly in the week ended Oct. 4, mainly due to a price jump in Asian markets.
US, offshore HR prices diverge a bit more
US hot-rolled (HR) coil prices moved slightly higher again this past week but remain marginally higher than offshore material on a landed basis. Since reaching parity with import prices in late August, domestic prices have been slowly pulling ahead of imports. This has been driven by a slight deviation in price movements – slow but […]
Despite recent dip, US CR prices remain more expensive than imports
The price gap between US cold-rolled (CR) coil and offshore product has shrunk slightly this week ended Sept. 27 as stateside tags edged down. The premium slipped moderately but remains well ahead of the 10-month low from late July.
US HR prices up slightly vs. imports
US hot-rolled (HR) coil prices inched up again this past week but remain just a touch more expensive than offshore material on a landed basis.
US CR prices push ahead of imports
The price gap between US cold-rolled (CR) coil and offshore product widened this week as stateside tags inched up. The premium has been steadily increasing after falling to a 10-month low in late July.