US steel imports fell 40% year-on-year in May 2026, the most significant monthly decline since the 50% tariff rate was implemented in mid-2025. The volume reduction is concentrated in flat-rolled products from the EU, South Korea, and Japan, all of which face the full 50% rate.
Domestic mill shipments have increased 12% over the same period as Nucor, Cleveland-Cliffs, U.S. Steel, and SDI run near capacity. But at 82% utilization, there is limited room to increase output further without bringing idled blast furnaces back online — a process that takes 6-12 months and requires significant capital investment.
The US-UK steel agreement, which grants UK mills a reduced 25% tariff on a 500,000-tonne quota, has been barely utilized. UK exports to the US fell 15% in May as European HRC prices ($820/st) are still $383/st below US prices, but UK mills lack the incremental capacity to exploit the quota.
The 85% US content adjustment announced June 8 provides some relief for service centers that import semi-finished slabs for processing in the US. However, slab imports from Brazil and Canada are already subject to quotas, limiting the volume that can flow through this channel.
The net result is a structurally tight US flat-rolled market through at least Q3 2026. Seasonal demand weakness in Q4, combined with potential for additional import quota increases, could provide modest price relief, but the underlying tariff regime remains the dominant structural factor.
The import wall is structural, not cyclical. Buyers should diversify supply across domestic mills and negotiate quarterly allocations rather than spot purchases. Explore toll-processing arrangements with service centers using the 85% US content rule for slabs. The $1,100-1,200 range is the new normal, not a spike.