Hot-rolled coil buyers continue seeking certainty

Market considerations

This week, market participants around the US say demand remains subdued, yet steady. Unmoved by 50% tariffs on steel imports, buyers are also resisting panic-driven steel purchases of hot-rolled coil, fueled by uncertainty surrounding the impact of escalating US involvement in another Iranian conflict.

Many in the market are adamant the conflict in the Middle East will have no bearing on the price of domestically produced HR. Sources also note that if buyers are unwilling to absorb tariff costs and continue to cancel import orders, domestic mills will begin to absorb those buyers, bolstering domestic HR demand.  

Trade policies

A Midwestern-based service center executive says market participants are not price sensitive right now. He suspects that buyers are cautious and tariffs for Canada and Mexico could be altered. 

“When imports find an extra cost of 50%, domestic producers need to test for higher prices. I think a deal gets struck on 232, along with a later rewrite of the USMCA. This isn’t a contrarian view. So, it’s probably helping keep prices subdued,” said the executive.  

He continued, “Geopolitics is wild; folks are getting desensitized to major issues. I have no idea how this plays out.” 

On the West Coast, a distributor says he has canceled orders from abroad. He does not foresee movement in the market until tariff negotiations are finalized.

“I just believe until tariffs get decided, we aren’t going to be seeing a lot of clarity in the market this summer,” he said.

An East Coast distributor contends that with all the uncertainty in the market, it is a “boring” time. He says when buyers cannot plan, they pause mid- to long-term decisions and await clarity.

“It’s a boring market for the time being. But with this crazy world and current conflict with Iran, anything can happen. Until President Trump gets what he wants, I don’t see tariffs coming off Mexico or Canada,” he said.  

Mill prices

While buyers are cautious and purchasing only as needed, a different Midwestern-based service center thinks domestic mill prices will hover around the $800-900/short ton range.  

“I think pricing will be like a stone skipping across the lake – up and down but never far from the point it travels,” he says. Adding, “We are not seeing a lot of demand right now and all of the mills that I work with are still offering normal lead times. Most mills have told me that contract customers are buying as close to the minimum as possible.”   

On Monday, Nucor carried the consumer spot price base of $900/st for HR coil from the previous week.  

Many sources indicate that mills are negotiating below published list prices, with SMU’s survey this week confirming that most mills are willing to talk price on most steel products.

As of Tuesday, SMU’s price range for HR coil is $830-920/st, averaging $875/st FOB mill, east of the Rockies.