The construction sector’s demand for steel is providing a steady undercurrent of support for HRC prices. Non-residential construction spending reached a seasonally adjusted annual rate of $1.28 trillion in May, up 0.6% from April. Manufacturing construction accounted for the largest gains, up 1.4%, driven by semiconductor and EV battery plant builds.
Infrastructure spending continues to accelerate. The bipartisan infrastructure law has now disbursed $385 billion of the $1.2 trillion authorized, with the pace of disbursement increasing as projects move from planning to construction. The steel content per infrastructure dollar averages 25-40 tons per $1 million spent.
Energy-related steel demand is also contributing. The US added 6.8 GW of new solar capacity in May and 2.1 GW of wind, all of which requires significant quantities of structural steel for mounting systems and towers. Pipeline projects, including the delayed Mountain Valley Pipeline, are consuming large-diameter pipe.
Import competition remains manageable. May imports of steel mill products totaled 2.1 million tons, down 8% year-over-year and below the Section 232 quota limits for most product categories. The Biden administration’s focus on domestic content preferences in federally funded projects is favoring domestic mills.
Construction-driven demand is the most durable support for HRC prices. Unlike consumer-driven demand, infrastructure spending is relatively recession-resistant and multi-year. Buyers should incorporate a structural demand premium into their steel cost models for 2026-2027. Expect the floor for HRC to be $1,050-1,100/st this cycle, higher than previous cycles.