The US HRC market is stable with prices holding at $825/st in the Midwest, supported by potential Section 232 changes. The tariff review, expected in July, could increase steel import tariffs from 25% to 30% and potentially expand quota restrictions. Import license applications surged 12% in June as buyers front-run any tariff changes.
The European market is under pressure, with EU HRC prices declining 15/tonne this week to 640/tonne as import volumes increase. Safeguard quota volumes are being filled for several origin countries, particularly India and Turkey, who have been redirecting exports from the US market. EU buyers are postponing purchases in anticipation of further price declines.
The price differential between US and EU HRC has widened to approximately $125/st (using 1 tonne = 1.1023 st). This spread is attracting import volumes to the US market, but the pending tariff review is creating uncertainty that is delaying contracting decisions.
In Asia, HRC export prices from China stabilized at $490/mt FOB, with limited buying interest from Vietnam and South Korea. Japanese HRC export offers were at $510/mt FOB, maintaining a premium to Chinese material on quality grounds. The Asian market is well-supplied and buyers are patient.
The Section 232 review is the critical near-term catalyst for US HRC buyers. If tariffs increase to 30%, expect an immediate price spike of $30-50/st. Buyers with H2 requirements should layer in hedges now at $825 rather than waiting. EU buyers should wait for further price weakness as import volumes pressure the market.