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    Analysis

    February 20, 2026

    HRC vs. prime spread widens in February

    Written by Ethan Bernard & Stephen Miller

    The spread between domestic hot-rolled coil and prime scrap prices widened slightly in February. It has been trending in that direction since October.

    SMU’s average HRC price was $975 per short ton (st), FOB mill, east of the Rockies, as of Tuesday, Feb. 17. That’s even with the previous week but up $30/st from January.

    For busheling, tags in February jumped $37.50 month over month to an average of $460 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 $564/st as of Friday, Feb. 20. That’s an uptick of $6/st from a month earlier. This keeps the spread in territory not seen since the beginning of 2024, when it stood at $588/st (Figure 2). 

    What’s going on?

    The US busheling price will most likely start to decrease as spring weather starts to loosen up scrap flows. Whether that happens in March or April is uncertain at this point.

    However, this cannot be said about HRC. Steelmakers have been busier so far this year, and it is unlikely there will be an imminent decline in steel prices. So, this implies the spread between these two commodities should widen in the next 1-2 months.

    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 112% premium over prime scrap, down from 121% a month earlier.

    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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    Stephen Miller

    Stephen Miller started his career in the scrap metal industry in 1978 at Luria Brothers in Cleveland. Over the last 40-plus 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.

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