Scrap Prices North America

HRC vs. prime scrap spread flat in November

Written by Ethan Bernard & Stephen Miller

November 15, 2024

The price spread between hot-rolled coil (HRC) and prime scrap remained the same in November. That’s because prices for both were at roughly the same levels seen a month earlier, according to SMU’s most recent pricing data.

SMU’s average HRC price ticked up week over week, and the November price for busheling scrap was sideways.

Our average HRC price was $690 per short ton (st) as of Nov. 12, up $10 from the previous week.

At the same time, busheling tags remained flat at an average of $405 per gross ton (gt) in November vs. October. Figure 1 shows price histories for each product.

After converting scrap prices to dollars per short ton for an equal comparison, the differential between HRC and busheling scrap prices was $328/st as of Nov. 14, unchanged from a month earlier (Figure 2). 

What’s going on?

With scrap as the main input for EAF steelmaking, the spread between HRC and prime scrap is an important indicator for the steel industry.

Though well off $490/st at the start of the year, a $328/st spread is still relatively healthy. But it’s a far cry from $1,407/st in October 2021 – amid the snapback in demand following the early days of the Covid-19 pandemic.

Both busheling and HRC are considerably lower than they were at this time last year. On Nov. 14, 2023, SMU’s average price for HRC was $940/st while in November 2023, SMU’s busheling price stood at $371/gt.

Heading into January 2024, we saw a bounce. Our busheling price jumped to $438/gt to ring in the New Year, and our HRC price shot to $1,045/st as of Jan. 2, 2024.

Can we expect something similar this year? Hard to say, but it looks unlikely. Is there too much HRC out there now, or demand is sluggish? Whatever the case, there doesn’t seem to be enough fuel in the tank to send us roaring across the finish line in 2024 for either HRC or busheling.

HRC premium as a percentage

The chart on the right-hand side below explores the spread relationship differently: We have graphed HRC’s premium over busheling scrap as a percentage. HRC prices carry a 70% premium over prime scrap – little changed form a month ago.

Ethan Bernard

Ethan Bernard is a reporter and editor for Steel Market Update. He previously worked for American Metal Market as a copy editor in the New York office for two years starting in 2008. Later, he copy edited AMM’s monthly magazine on a freelance basis from 2015 until 2017. With experience in financial copywriting and textbook publishing, he holds a BA in Comparative Literature from UC Berkeley, and an MFA. in Creative Writing from New York University. He can be reached at ethan@steelmarketupdate.com or 724-759-7871.

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Stephen Miller

Stephen Miller started his career in the scrap metal industry in 1978 at Luria Brothers in Cleveland. Over the last 40+ years, he has worked in all capacities in the trading business. He has had positions in both domestic and international scrap trading. In addition to scrap, Miller was at the forefront of the pig iron trade and established a pig iron distribution company under the name of Ferrosource, Inc. Most recently, Miller has concentrated on the scrap export market and regularly does consulting for several companies in the industry.

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