Hot Rolled Coil Premium over Busheling Scrap Comparison

Written by Brett Linton

According to the latest Steel Market Update data, the spread between hot rolled coil prices and prime scrap prices has changed course after reaching an 18-month low in March. The latest spread is in line with levels seen this time last year, and two times higher than pre-pandemic spreads.

The SMU hot rolled coil price average rose to $1,480 per net ton ($74.00 per cwt) on Tuesday, the highest price seen since January. Recall our HRC price average peaked last September at $1,955 per ton, gradually falling to a low of $1,000 per ton in early March, then rapidly rising following the Russia-Ukraine war.

Busheling scrap prices settled last week at $775 per gross ton for April, up $75 per ton from March and up $245 per ton over February. March and April mark the two highest monthly scrap prices in our recorded history, surpassing the previous high of $670 per ton seen in July and August 2021.

The price differential between HRC and busheling scrap is now $705 per ton, averaging $700 per ton over the past four weeks. We saw a low of $300 per ton in early March. The spread had gradually narrowed from a record-high $1,365 per ton in September 2021. This time last year the spread was slightly higher at $850 per ton, while April 2020 was just $215 per ton.

The chart below shows the same hot rolled vs scrap price spread, but with busheling scrap converted to dollars per net ton for an apples to apples comparison. PSA: Did you know our Interactive Pricing Tool has the capability to show steel and scrap prices in dollars per net ton, dollars per metric ton, and dollars per gross ton?

The latest HR-scrap spread is $788 per net ton, whereas the September high was $1,428 per ton. For comparison, the 2019 average spread was $324 per ton, the 2020 average was $310, and the 2021 average was $1,080.

The chart below explores this relationship in a different way – we have graphed the spread between hot rolled coil and busheling scrap prices as a percentage premium over scrap prices. HRC prices now carry a 91% premium over prime scrap, having reached 105% three weeks prior. In early March this premium reached a low of 43%, having fallen from a record 236% last October. This time last year HRC held a 152% premium over scrap, while April 2020 saw a 81% premium. HRC held the lowest premium over busheling scrap back in November 2011 when it reached 29%.

This comparison was inspired by reader suggestions; if you would like to chime in with topics you want us to explore, reach out to our team at

By Brett Linton,

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