Hot-rolled steel coil futures in the United States climbed to $940 per tonne this week, approaching the 14-month high of $945 set in mid-March and marking a 30% surge year-to-date.
US steel coils surge to one-year high
The sharp rally comes as escalating trade measures by the U.S. government place renewed stress on domestic capacity, driving supply concerns among manufacturers and intensifying price pressures throughout the metals market.
The latest round of tariffs—announced by President Trump—slaps a 25% levy on all imported steel products, extending and intensifying the protectionist stance from his first term. This sweeping move reignites fears of a global metals trade war and effectively heightens buying competition among U.S.-based manufacturers, who now face reduced access to cheaper foreign steel.
With constrained supply and rising input costs, domestic steel producers have seized the opportunity to hike prices, leveraging their strategic position as the primary source of ferrous metals now favored under tariff protections. Industry analysts note that the current production capacity of U.S. mills remains insufficient to meet the elevated demand—especially from key sectors like automotive, construction, and defense—making further price increases likely in the short term.
Broader manufacturing outlook remains mixed
While the broader manufacturing outlook remains mixed due to retaliatory tariffs on machinery, electronics, and consumer goods that are dampening aggregate demand, the steel sector appears to be benefiting from a uniquely tight supply-demand dynamic. The upward pressure on prices comes even as global steel markets, particularly in Asia, show signs of softness.
Rebar benchmarks across China and Southeast Asia have declined in recent weeks, and base metal prices on the London Metal Exchange and Shanghai Futures Exchange have remained under pressure—underscoring the diverging paths of U.S. and international steel markets. Analysts suggest this divergence reflects not only trade policy shifts but also differing economic trajectories, with the U.S. now battling a supply crunch while much of the world deals with demand-side headwinds.
As trade barriers rise and input scarcity deepens, downstream industries in the U.S. may soon feel the pinch more acutely, especially if additional tariffs are placed on related raw materials like aluminum, nickel, and rare earth elements. For now, however, domestic steelmakers are enjoying one of their most favorable pricing environments in over a year—though that advantage may prove short-lived if inflation concerns or a broader economic slowdown catch up with the rally.
