Key Highlights

  • The US HRC average rose US$10 to US$1,290/st in the week to 20 Oct (+0.8%), while Nucor lifted its CSP US$15 to US$1,255/st.
  • Tariff-restricted imports, mill lead times stretching into December or 2027 and stable-to-improving demand are handing mills pricing power.
  • Buyers expect further increases; the next tests are Nucor's weekly price, CME futures near US$1,285 and the USW–U.S. Steel labour talks.

US hot-rolled coil keeps grinding to new multi-year highs, with tight domestic supply and tariff walls leaving buyers little choice but to pay up.

Market Update

US flat steel keeps climbing. The US hot-rolled coil average rose US$10 on the week to US$1,290 per short ton, and HR prices have risen every week in September and October to date. Nucor raised its consumer spot price by US$15 to US$1,255/st in its 19 October customer letter, up from US$1,230 in early October. Its California joint venture CSI also added US$15, to US$1,320/t.

Futures agree with the physical market. The US Midwest HRC futures contract settled at US$1,285 on 20 October, up from US$1,276 on 13 October, a 0.7% weekly rise.

The longer view is striking. Industry data show HRC up 52% in a year to US$1,255/st, a level last seen in May 2022, with domestic coil at US$1,220–1,300/st on 16 October against US$825–865 a year earlier.

Key Drivers

Supply is tight. Average lead times are stretching into mid- or late December, with some mills now quoting into 2027. Nissan confirmed it "continues to manage a steel supply constraint affecting some of our production schedules". AZZ chief executive Tom Ferguson put it bluntly: "It's tight. We see it every day, particularly galvanized sheet metal".

Imports cannot easily fill the gap. The rally has been attributed to import restrictions under President Trump's trade tariffs. Buyers say imports still appeal on price and availability, "but lead times, tariffs, and other risks remain".

Demand is holding up. A widely tracked steel demand index rose to 64.5 in mid-October from 61.5 earlier in the month, and most buyers described demand as stable to improving. The Federal Reserve's Beige Book noted that long mill lead times kept customer inventories lean and prices high.

Outlook

Mills are the clear winners. Steel Dynamics ran its mills at 92% utilisation in the third quarter, against an estimated 80% for the industry, and expects tight supply, lean inventories and firm demand to support pricing into 2027.

Losers are manufacturers and service centres paying the highest coil prices since 2022 with thin inventory buffers. Raw material costs are also rising: US mills paid US$20–30/gt more for October scrap, and market players expect another increase in November. That gives mills a cost argument for further hikes.

Among London-listed names, Hill & Smith (LSE:HILS) has significant US operations in galvanizing and infrastructure products, making it a sizeable steel buyer. Higher coil costs can squeeze margins for LSE:HILS unless they are passed through to customers.

There are risks to the rally. Buyers are split on whether tariff policy is helping their businesses, and imports remain attractive where lead times allow. Any sign that offshore tonnes are arriving in volume could cool the futures curve first. Trade cases are shifting at the margin too: Commerce lowered Mexico's anti-dumping rate on corrosion-resistant steel for Galvasid to 14.54% from 24.05%.

Next week, watch Nucor's Monday price announcement, any slippage in CME futures that would signal buyer resistance, and the resumption of in-person labour talks between the USW and U.S. Steel. For now, buyers expect prices to keep rising, supported by limited supply. Steel cost commentary from LSE:HILS would also be telling.