The U.S. HRC market remains in a distinctive position compared to global steel markets. The 50% Section 232 tariffs, raised from 25% in June 2025 and still in force in 2026, continue to shield domestic mills from import pressure. The price gap between U.S. HRC and offshore HRC has narrowed but still reflects tariff protection, keeping domestic mill pricing above $1,100/st.
Mill capacity utilization reached 80.0% in late April 2026, the highest since August 2024. Industry commentary describes relatively controlled production volumes and allocation policies that limit spot availability. U.S. raw steel production has risen for five consecutive weeks entering the summer, indicating a tight but not overheated supply environment.
Demand is supported by multiple structural factors. U.S. construction spending remains historically elevated, with the annualized rate at about $2.19 trillion in January 2026 and posting consecutive year-on-year gains. Data center construction has tripled in three years, driven by AI infrastructure build-out. This is highlighted as an increasingly important steel demand driver that was barely on the radar five years ago.
Energy infrastructure spending adds another demand layer. Pipeline, wind turbine, and solar mounting structures all consume significant steel. The energy transition is steel-intensive in the construction phase, even if the operating phase uses less steel.
Automotive demand has been steady, with light vehicle sales holding above 16 million annualized. The shift toward EVs creates mixed signals: EVs use less steel per vehicle than ICEs, but heavier battery packs require more advanced high-strength steels at higher per-tonne prices.
U.S. HRC buyers face a market where tariffs structurally support domestic pricing above global levels. The 50% tariff means the import option is a ceiling, not a floor — if domestic prices rise far above landed import costs, buyers can source offshore, but the 50% tariff means that ceiling is high. Buyers should (1) maintain relationships with multiple domestic mills to ensure allocation access, (2) monitor the CFR Gulf Coast import price versus domestic HRC, and (3) consider fixed-price contracts for H1 2027 if domestic mills offer them at current levels. The data center construction boom provides real demand support — this is not speculative. The key risk: if the 232 tariffs are reduced or removed, domestic HRC prices could correct 15-20% within weeks.