The HRC market is experiencing a convergence of bullish factors that analysts had not anticipated at the start of Q2. Steel demand is recovering across major consuming sectors, while supply is constrained by mill outages, import barriers, and depleted service center inventories.
The automotive sector has been a major source of demand growth, with US light vehicle production running at an annualized rate of 15.8 million units, up from 15.2 million in Q1. The shift toward larger vehicles, which require more steel per unit, is amplifying the demand impact.
Manufacturing construction is booming, with semiconductor fabs, battery plants, and electric vehicle assembly facilities under construction across the US. These projects require significant quantities of steel for structural framing and equipment, providing multi-year demand visibility.
The forward curve has shifted upward, with Q3 2026 futures now at $1,165/st, up $45/st from a week ago. Q4 futures are at $1,120/st, suggesting the market expects some moderation but prices remain elevated relative to Q1 averages of $1,050.
Producers have responded to tightening conditions by pushing spot prices higher and reducing discount programs. Several mills have announced $40–60/st price increases for July deliveries, with expectations of further increases if order activity continues at current levels.
The building momentum in HRC suggests prices have further upside. Buyers should secure Q3 requirements aggressively given the supply-demand imbalance. For Q4, consider partial hedging now with the expectation that mill outages resolve and imports gradually increase.