The HRC import arbitrage window remains effectively closed despite domestic prices reaching $1,156/st, as the 25% Section 232 tariff on steel imports combines with existing anti-dumping duties to render offshore material uncompetitive. Import volumes fell 12% year-over-year in May to 2.1 million short tons.
Hot rolled coil from South Korea, Japan, and Germany — the three largest offshore suppliers to the U.S. market — faces delivered costs of $1,100-$1,140/st after tariffs and freight. This narrow gap of $16-$56/st does not provide sufficient margin for importers to commit to large-volume spot cargoes.
The effective import barrier is reinforced by the Section 232 country-specific quota system. Countries with remaining quota allocations face a 25% tariff; those that have exhausted their quotas face the same 25% tariff. There is no tariff-free quota for steel imports from any country.
Ongoing trade cases against corrosion-resistant and grain-oriented electrical steel from multiple countries are adding further friction. Even where HRC itself is not the target of a specific case, the broader trade environment has created a chilling effect on steel import activity across all product categories.
The closed import arbitrage window means domestic mills have pricing power through at least Q3 2026. For procurement teams, this is the key structural factor to watch: if the import spread widens (import delivered cost below $1,050), cargoes will flow and cap prices. Until then, domestic mill pricing will remain elevated. Consider multi-month fixed-price contracts to lock in current levels.