The global hot rolled coil market is trading at levels not seen since early 2023. The CRU-linked indices moved from the mid-$900s to over $1,030-1,070/st in the US through Q1-Q2 2026, with Q1 alone surging 12.7%. US mills have announced successive price increases, maintaining pricing power through disciplined output management.
US raw steel production stood at 1.872 million net tons in the week ending May 30, with a capacity utilization rate of 81.1%, up from 76.6% a year earlier. June production remains above prior-year levels, though slightly off recent weekly highs. Domestic supply is tighter than many expected, Steel Market Update noted, with mills prioritizing balance over volume.
Service center inventories are at their lowest levels in several years, limiting buyers' ability to replenish stock. This lean inventory environment magnifies any supply shock or mill price hike into spot price strength. Distributors are returning to strategic stocking in pockets where contract volumes are insufficient.
Q1 2026 US HRC demand was driven by reshoring manufacturing initiatives, stronger housing starts, and automotive production ramp-ups. Ongoing demand from autos, infrastructure, and pipe/tube remains steady, though pricing strength stems more from constrained supply and Section 232 tariffs than runaway consumption.
The HRC market shows no signs of softening. With mills running at 81% utilization but maintaining disciplined output, and tariffs at 50% blocking imports, the price floor is well-supported. The lean service center environment means any demand uptick translates directly into mill price increases. Buyers should lock in volumes rather than relying on spot market availability. The risk is not that prices fall, but that they continue to grind higher through the summer.