Hot rolled coil prices exploded higher on Friday as market participants reacted to reports that the administration may increase Section 232 tariffs on steel imports from 25% to 40%. The potential tariff hike, which could be announced as early as next week, would significantly reduce import competitiveness and tighten the domestic market.
Domestic mill lead times extended to 7.2 weeks from 6.7 last week as buyers rushed to secure capacity before any price increases. Nucor, Cleveland-Cliffs, and US Steel all reported strong order books, with some mills limiting spot allocations. The lead time expansion is the most aggressive since the post-pandemic demand surge of 2021.
The import premium versus domestic HRC widened to $85/st, signaling that imported material is becoming less cost-effective. This typically supports further domestic price increases as buyers shift toward local supply. Import data showed May arrivals at 420,000 tonnes, down 15% from April and the lowest since February.
Capacity utilization among US electric-arc furnace (EAF) mills rose to 79.4%, up 1.2 percentage points week-over-week. Integrated mill utilization held steady at 82.1%. Total raw steel production for the week was 1.82 million tonnes, up 1.5% week-over-week. The AISI noted that year-to-date production is 2.1% above 2025 levels.
The $67 spike in a single session underscores how quickly steel markets can move on trade policy changes. For procurement, this is a shock event. If you need Q3 HRC, lock in a minimum of 50% at current levels. The risk of further tariff-driven upside ($1,250+) outweighs the downside to $1,100 in this environment.