Higher S232 keeps US HR prices at a discount to EU

Recall that the re-emergence of Section 232 on March 12 narrowed the gap between imports and US prices on a landed basis. Before that date, allies such as Japan and the EU were not subject to the 25% S232 tariff, and instead had quotas.

The gap immediately widened after S232 was doubled (see Figure 1).

By the numbers

This week, SMU’s average domestic HR price was $860 per short ton (st), up $15/st vs. the previous week. Still, domestic HR is theoretically on average 9% cheaper than imported material, down from last week when US prices were 13% cheaper.

It remains a notable swing from just two weeks ago when US product was roughly 2.9% more expensive.

If Asian prices weren’t at such a discount to US prices, stateside product would be roughly 20% cheaper than imports. German and Italian HR are at a massive premium to US hot band on a landed basis.

Just about three months ago, domestic prices were 25.5% higher. That changed fast when S232 kicked in and was then exacerbated once S232 doubled on Wednesday.

In dollar-per-ton terms, US HR is, on average, $77/st cheaper than offshore product. That’s down from $110/st last week, but still a swing of more than $100/st before President Trump doubled tariffs.

The charts below compare HR prices in the US, Germany, Italy, and Asia. The left side highlights prices over the last two years. The right side zooms in to show more recent trends.

Methodology

SMU calculates the theoretical spread between domestic (FOB mill) and foreign (delivered to US ports) HR coil prices. We do this by comparing our weekly US HR assessment to CRU’s weekly HR indices for Germany, Italy, and Southeast Asian ports. This calculation is purely theoretical. Actual import costs can vary significantly and affect the true market spread.

To estimate the CIF price at US ports, we add a $90/st charge to all foreign prices to account for freight, handling, and trader margins, along with the 50% blanket tariff. This $90/st figure serves as a general benchmark — buyers should adjust it based on their specific shipping and handling expenses.

If you import steel and have insights on these costs, we’d love to hear from you. Contact the author at david@steelmarketupdate.com.

Asian HRC (Southeast Asian ports)

As of Wednesday, June 11, the CRU Asian HRC price was $440/st, flat vs. the week prior. Adding a 50% tariff and $90/st in estimated import costs, the delivered price of Asian hot band to the US is ~$750/st. As noted above, the latest SMU US HR price is $860/st on average.

The result: Prices for US-produced HR are theoretically $110/st higher than steel imported from Asia, up $15/st w/w. Despite the added tariff margin, the premium remains well below recent highs seen in 2023 when stateside tags were ~$300 /st more expensive than Asian products.

Italian HRC

Italian HR prices ticked lower by $10/st this week to $619/st, and about $16/st lower over the past four weeks, according to CRU. After tariffs were doubled to 50% and $90/st in estimated import costs, the delivered price of Italian HR is, in theory, $1,018/st.

That means domestic HR coil is theoretically $158/st cheaper than imports from Italy. That’s $30/st less w/w. It still represents a $392/st swing before S232 was reinstated and then doubled. Without the 50% tariff, US prices in theory would be $151/st above Italian imports.

German HRC

CRU’s German HR price was down $25/st to $635/st this week. After adding a 50% tariff and $90/st in import costs, the delivered price of German HR coil is, in theory, $1,043/st.

The result: Domestic HR is theoretically $183/st cheaper than HR imported from Germany, a $53/st cut vs. last week.

US hot band held a $207/st premium over German HR just about three months ago – which had represented the widest margin in 14 months. Without the 50% tariff, US prices in theory would be $135/st above German imports.

Editor’s note

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. 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. On March 12, 2025, undiluted Section 232 tariffs were reinstated on steel. All steel imports and many derivative products faced a 25% tariff. Effective June 6, 2025, Section 232 tariffs were increased to 50%. Therefore, the German and Italian price comparisons in this analysis now include a 25% tariff. We do not include any antidumping (AD) or countervailing duties (CVD) in this analysis.