Final Thoughts

What a difference a few weeks makes.

Even folks who had been firmly in what I’ll call the “February peak” camp now seem to agree sheet and plate prices could move higher for longer than they anticipated. That’s in our most recent survey results. (See slide 29. Only 15% think prices will peak this month.) And it’s something I hear repeated in calls to some of you.

There also appears to be a growing consensus that HR prices could move above $1,000/st on average. Where does it stop? $1,050/st? $1,000/st? I don’t pretend to know.

What might have caused the market consensus to shift? It depends on who you talk to.

Maybe it was Nucor going up $10 per short ton (st) on its list price for hot-rolled (HR) coil this week instead of the usual $5/st. Maybe it was HR futures (at least on the high end) touching $1,000/st on Tuesday for the March contract. As it happens, the high end of SMU’s price range for HR this week also hit a grand.

Or maybe it’s that production issues at certain domestic mills and limited import competition are keeping supplies tighter for longer than expected.

Case in point: We continue to hear a major mill continues to have trouble getting steel to customers in a timely fashion. Once again, the reasons why depend on who you ask. Maybe they booked more business than anticipated. Perhaps it’s a software issue. Maybe it’s older equipment.

Whatever the reason, the impact is the same – market participants tell us their steel is being delivered late. Like, well beyond published lead times. And some customers say they’ve had to buy from other mills to replace tons that still haven’t arrived. Spot tons? Forget about it.

In other instances, the issues might be less severe. We’ve heard that another mill has been a little behind schedule ramping up a new EAF. Maybe it’s not so much commercial grades. Maybe it’s more issues around qualifying more demand grades – API, TRIP steels, etc. And then there are questions around spot availability at a third mill building slabs ahead of a planned outage. All of it squeezes supplies at least a little. The combined impact is more significant.

Meanwhile, steel import volumes remained historically low through January, the last full month for which government data is available.

Could they tick up in February? Sure. The US was licensed to import approximately 1.09 million metric tons (mt) through Feb. 17, the last date for which Commerce figures were available. That’s a daily rate of about 64,000 tons a day. If that pace were maintained, imports for this month weigh in at around 1.80 million mt. That would be significantly above December-January levels but still be well-below levels we saw in the first half of last year when import volumes averaged around 2.21 million mt per month.

There are some questions about whether we could see significantly higher import volumes this spring/summer. And with domestic prices high, that seems possible. Even so, you could make the case that Houston – once the steel import capital of the US – has become almost a domestic steel town. And with tariffs and domestic content requirements, it’s hard to see H-Town becoming the freewheeling place for imports it used to be.

It’s a similar story in the North. You’d often hear of Canadian mills assembling vessels of steel for delivery to Great Lakes ports as ice melted. For starters, good luck getting anything across Lake Erie anytime soon. It’s nearly frozen solid. And, also, we’re not aware of any flotilla of Canadian coils headed to the US.

Here is another way to look at it. Canada – historically the largest foreign steel supplier to the US – shipped only about 200k mt of steel to the US in January 2026, nearly three times less than the roughly 600k mt it shipped to the US in January 2025. Also, last month, Mexico shipped about as much steel to the US as Canada did. And South Korea shipped more.

To date in February, Canadian import license volumes (~100k mt through Feb. 17) trailed South Korea (~238k mt) and Brazil (~144k mt). They are running roughly even with Japan (~100k mt).

Rewind to last fall, and there was talk of Section 232 coming off Canada or at least being significantly lowered. I don’t hear much talk of that now. And there are times when I wonder whether we still have a closely intertwined, cross-border Great Lakes steel supply chain.

In fact, with $1,000/st HR almost taken for granted, the question I’m getting more often is where the bottom might be in six months. Is it $900/st? $800/st? Some of the same folks who would have been happy with steel prices in the $600s/st in past years would now be shocked if prices fell into the $700s/st.

Another thing that’s curious about the current market is how tight our price ranges have become. Just look at HR. The spread between the low end of our range and the high end is only $40/st. It’s been a lot wider than that in the past.

Most mills are very profitable at current price levels. It might take only one to cut a deal at lower numbers. They’d still rake in plenty of cash. That scenario is what some of you saw as potentially taking the bloom off the rose of this price upswing.

Maybe it will happen at some point. Maybe the the steel bubble will pop along with the AI bubble. But, as best as I can tell, there is no evidence of it happening anytime soon. In fact, while headlines of a potential bubble in AI are common, I can’t recall the last time I heard talk of a bubble in steel.

SMU Steel Summit

Registration is officially open for SMU Steel Summit on Aug. 24-26 at the Georgia International Convention Center in Atlanta! We’ll have updated on the agenda in the weeks. In the meantime, you can book your spot at the big show here.