Features

HRC vs. prime scrap spread narrows slightly

September 11, 2025

The price spread between prime scrap and hot-rolled coil (HRC) narrowed by a hair this month, according to SMU’s most recent pricing data.

SMU’s average HRC price as of Sept. 9 was $800 per short ton (st) FOB mill, east of the Rockies. That’s down $5 from the previous week and $20 from a month earlier.

Meanwhile, busheling tags for September fell $20 from August to an average of $405 per gross ton (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 $438/st as of Sept. 10. That’s down $3/st from the previous month (Figure 2). This is the second consecutive month that it has narrowed.

What’s going on?

The spread between HRC and #1 Busheling basically moved sideways as both prices moved down in similar amounts. US-based HRC steelmakers are looking forward to increased business as the year wraps up, believing Section 232 tariffs will enhance their prospects.

If they are correct, the spread may widen but just modestly. The mills attempted to buy scrap at lower levels, but they could only decrease busheling prices by $20/gt, rather than $40/gt.

This shows there is seller resistance to lower price tags on scrap. Therefore, any widening in the spread may have to come from increased HRC levels in the months ahead.

HRC premium as a percentage

The graph on the right-hand side of Figure 2 shows the spread relationship differently: We have graphed HRC’s premium over busheling scrap as a percentage. HRC prices now hold a 98% premium over prime scrap, up from 93% 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.