Ferrous Scrap

HRC vs. prime spread narrows further in May

Written by Ethan Bernard & Stephen Miller

May 13, 2025

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

SMU’s average HRC price fell week over week (w/w) and month over month. The May price for busheling also dropped from April.

Our average HRC price as of May 13 stands at $845 per short ton (st) FOB mill, east of the Rockies. That’s down $30/st from the previous week and a drop of $50/st m/m.

Meanwhile, busheling tags also fell m/m in May. They are off $30.00 per gross ton (gt) from last month, with an average of $425/gt. 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 $466/st as of May 13. That’s a decrease of $33/st from a month earlier (Figure 2). It has narrowed since March.

What’s going on?

This narrowing was mainly caused by the increased demand for #1 Busheling in a supply-short market. Lagging manufacturing is generating less prime scrap.

The HRC mills prefer prime scrap vs. shredded. So, busheling only went down $30/gt while shredded went down as much as $50. This caused the narrowing as HRC went down further.

If HRC maintains its price going into the summer months, we may see further erosion in scrap prices, and the spread may have a chance of widening.

HRC premium as a percentage

The chart on the right-hand side below shows the spread relationship differently: We have graphed HRC’s premium over busheling scrap as a percentage. HRC prices now have a 99% premium over prime scrap, even with a month ago.

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.

Stephen Miller

Stephen Miller started his career in the scrap metal industry in 1978 at Luria Brothers in Cleveland. Over the last 40+ years, he has worked in all capacities in the trading business. He has had positions in both domestic and international scrap trading. In addition to scrap, Miller was at the forefront of the pig iron trade and established a pig iron distribution company under the name of Ferrosource, Inc. Most recently, Miller has concentrated on the scrap export market and regularly does consulting for several companies in the industry.