US hot rolled coil futures rallied 3.91% to $1,170 per short ton on June 9, the largest single-day gain in over a month. The move was driven by a combination of continued tariff protection that has limited import competition, tight spot market availability as domestic mills maintain order book discipline, and improving demand from the data center construction and infrastructure sectors.
US raw steel capacity utilization rose to 81.1% in late May, up sharply from 76.6% a year earlier, according to the American Iron and Steel Institute (AISI). The utilization rate is approaching the 82–85% range that historically gives mills pricing power, particularly in a tariff-protected market where imports face a 25% Section 232 duty.
The import arbitrage window has narrowed but not closed. Steel Market Update reports that the price gap between US HRC and landed offshore product is approaching parity as domestic prices have risen while global steel prices have softened. This suggests that the current US price premium is close to the level where imports would become competitive, providing a ceiling for further increases.
Regional dynamics differ: domestic mill pricing varies by region, with southern mills (Nucor, Steel Dynamics) quoting slightly lower than integrated northern mills (US Steel, Cleveland-Cliffs). The Midwest HRC index is at a modest premium to the CME futures, indicating healthy physical demand. The SHFE HRC contract in China traded at 3,392 CNY/mt ($474/st), underscoring the stark US premium.
HRC buyers face a tariff-protected market with mills in control of pricing. The narrowing import arbitrage window suggests prices may be approaching a ceiling, but domestic mill discipline remains strong. Consider layering in fixed-price contracts for Q3 2026 needs, but avoid locking in multi-quarter volumes at these elevated levels given the risk of demand softening in H2.