Foreign vs Domestic HRC Prices: Foreign Holds $200/ton+ Potential Savings

The incentive to purchase hot rolled steel imports over steel produced domestically continues to grow, according to Steel Market Update’s latest foreign versus domestic hot rolled steel price comparison. As domestic prices soar higher, foreign prices are flat or declining, holding potential discounts of 11% to 27% after taking freight costs, trader margins and tariffs into consideration. Foreign HRC prices are theoretically $197-727 per ton cheaper than domestic steel prices at this time. The spread between domestic and foreign prices has surged since late-May, surpassing the record levels seen earlier this year.

The following calculation is used by Steel Market Update to identify the theoretical spread between foreign hot rolled steel prices (delivered to U.S. ports) and domestic hot rolled coil prices (FOB domestic mills). This is only a “theoretical” calculation as freight costs, trader margins and other costs can fluctuate, ultimately influencing the true market spread. This compares the SMU U.S. hot rolled weekly index to CRU hot rolled weekly indices for Germany, Italy and Far East Asian ports.