Foreign HRC Competitiveness Remains Minimal

The appeal to import foreign hot-rolled coil (HRC) in place of purchasing domestic steel remains low to non-existent, but that may be changing, according to our latest foreign versus domestic price analysis. Foreign prices were flat to down as much as $40 per net ton this week, while domestic prices increased $5 per ton. Foreign HRC prices are now theoretically 0–2% cheaper than domestic steel. Prior to this week, US HRC prices were as much as 5% cheaper than imported steel in two regions. The potential discount on imported products began to narrow back in May and did so through September.

The following calculation is used by SMU to identify the theoretical spread between foreign HRC prices (delivered to US ports) and domestic HRC prices (FOB domestic mills). Our analysis compares the SMU US HRC weekly index to the CRU HRC weekly indices for Germany, Italy, and Far East Asian ports. This is only a theoretical calculation as costs to import can vary greatly and often fluctuate, ultimately influencing the true market spread.