The HRC import arbitrage window has closed as landed costs from major offshore suppliers exceed domestic mill pricing. CFR NOLA offers for HRC from Japan, South Korea, and Germany are approximately $1,050/st. After applying the Section 232 25% tariff — which most countries have not negotiated exemptions — duty-paid landed cost reaches $1,312/st, well above the domestic price of $1,156.00/st.
Import license applications for flat-rolled steel fell 8% month-over-month in June, with the largest declines from South Korea and Japan. South Korean mills, historically the largest offshore supplier of HRC to the US, have redirected volumes to Southeast Asia and Europe.
Import market share of US flat-rolled steel consumption declined to an estimated 18% in 2026, down from 20% in 2025 and a pre-Section 232 peak of 28% in 2018. The market share trajectory suggests the US is structurally less reliant on imported flat steel than at any point in the last decade.
Domestic mills have responded to the protected market with consistent upward pricing. Nucor's monthly HRC price announcements averaged 2.5% month-over-month increases through Q2 2026. Cleveland-Cliffs' order books are filled through August. US Steel operates at near-full capacity utilization.
One risk for buyers: as domestic prices rise above international parity, the incentive increases for US trade authorities to grant tariff exclusions or for foreign mills to price aggressively into the US market. Section 232 product exclusion requests filed in May 2026 totaled 127, up from 98 in May 2025, suggesting end-users are pressuring for relief.
With import competition limited by tariffs, domestic mill pricing power is near-term bullish. Monitor Section 232 exclusion requests as a leading indicator — a sustained increase above 150/month may signal policy risk. Hedge Q4 exposure if HRC approaches $1,250/st.