Ferrous Scrap

HRC vs. scrap spread continues to widen in September

Written by Ethan Bernard

September 13, 2024

The price spread between hot-rolled coil (HRC) and prime scrap widened again in September, according to SMU’s most recent pricing data.

SMU’s average HRC price slipped during the week, while the September price for busheling scrap was flat.

Our average HRC price was $685 per short ton (st) as of Sept. 10, off $5 from the previous week.

At the same time, busheling tags remained level at an average of $395 per gross ton in September. 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 $332/st as of Sept. 12, $10 higher than a month earlier (Figure 2). This is the second consecutive monthly increase. However, we have to go back to October of last year to find the spread in similar territory at $333/st.

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 73% premium over prime scrap, up from 71% a month ago. It last stood at 73% in the middle of September last year.

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 managing 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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