SunSirs: Divergent Price Trends in the International Steel Market in May

Flat Products (Plate and Coil)

Supported by tight spot supplies of hot-rolled coil (HRC), US ex-works prices for HRC rose month-on-month for the seventh consecutive month in May. According to MEPS estimates, the current US ex-works price range for HRC is $1,060–$1,100 per short ton, an increase of $20 per short ton (approximately $22 per metric ton).

Regarding capacity expansion, a significant wave of new global flat product capacity is set to come online in 2026. Nucor’s first-quarter earnings report indicates that construction of its new flat product project in West Virginia is 85% complete; the galvanizing line associated with the pickling unit is expected to begin trial production this summer, with the remaining downstream equipment coming online sequentially in the fourth quarter. Once fully operational, the project will have an annual flat product capacity of 3 million short tons (approximately 2.721 million metric tons).

In terms of imports, US HRC import volumes have rebounded slightly over the past three months; however, rising overseas steel prices and ocean freight rates suggest that the inflow of external supply will gradually tighten. Even as domestic mills steadily ramp up output, the combination of rising domestic production and a projected decline in summer import arrivals is expected to support US spot prices for flat products in the short term.

The supply-demand dynamic in the Canadian flat product market presents a stark contrast, characterized by an overall supply surplus in May and the failure of domestic mills to implement planned price hikes. Although Canada restricts the inflow of low-priced foreign steel through import quotas, domestic price coordination remains weak; the industry generally relies on low-price, high-volume strategies to compete for market share, which has dragged down spot prices. By the end of May, Canadian HRC quotes had dropped to C$980–C$1,040 per short ton, with the lower end of the range falling by C$40 per short ton. Meanwhile, cold-rolled coil (CRC) prices—which had remained flat for four consecutive months—saw a slight increase of C$10–C$20 per short ton in May. Leading Canadian mills have initiated voluntary production cuts, but restoring market balance requires industry-wide coordination to control output and slow the pace of bringing new capacity online. The EU will officially implement new steel import management rules on July 1; the core adjustments involve a significant reduction in tariff-rate quotas (TRQs) and an increase in the tariff on out-of-quota steel imports to 50%. Driven by traders' demand for early stocking, procurement demand for flat steel products in Northern Europe surged during April and early May as traders rushed to replenish inventories.

Demand in Southern Europe remained sluggish, with transaction volumes for flat steel in Italy and Spain declining month-on-month since April. To alleviate the pressure of insufficient orders, major steel mills in the region generally relaxed their pricing flexibility.

In May, downstream demand for flat steel in Central Europe weakened overall, and rising raw material costs could not be passed on to downstream sectors. The EU's current steel import safeguard measures lack corresponding protection clauses for downstream finished steel products; consequently, there is widespread concern that local manufacturing will relocate to low-cost regions in the medium to long term, continuously suppressing regional demand for industrial steel. Local manufacturers in Central Europe are currently struggling to compete with low-priced finished steel products from outside the region; the Czech automotive supply chain, however, bucked the trend with a recovery, seeing an 8.3% year-on-year increase in vehicle production in the first quarter—making it one of the few bright spots for demand in the region.

Amidst this divergence in demand, spot inventories of flat steel in Central Europe remained generally tight, with the supply gap for cold-rolled coils being particularly pronounced. Compounded by routine summer maintenance at steel mills, delivery lead times for flat steel orders in the region continued to lengthen. There was a marginal positive development on the supply side: the technical upgrade of Blast Furnace No. 3 at ArcelorMittal’s Polish plant was completed and production resumed, which is expected to lead to a slight recovery in local flat steel supply in Central Europe.

The rise in Asian flat steel prices in May was driven by a combination of rising raw material costs and supply contraction, with the increase in raw material costs serving as the fundamental driver. Voluntary production cuts in Japan and intensified anti-dumping measures against hot-rolled steel in South Korea further tightened regional supply and pushed up steel prices, although there was no substantial recovery in actual downstream steel consumption across the region.

Chinese flat steel prices saw a significant rebound in May; the average domestic price (based on MEPS data) rose by 6.5% month-on-month, marking the largest single-month increase since August 2025. In May, domestic ex-factory prices for hot-rolled coils rose by 180–190 RMB/ton, with mainstream spot quotes ranging from 3,010 to 3,130 RMB/ton at month-end; multiple major domestic steel mills simultaneously raised their ex-factory guidance prices for June. However, domestic end-user demand from infrastructure and manufacturing sectors remained weak, and the overall market outlook regarding future demand was bearish.

Japan raised ex-factory prices for flat steel products for the first time in four years; Nippon Steel and JFE Steel jointly announced a price hike of 10,000 yen/ton for May deliveries. MEPS data indicates that the average market price for flat steel in Japan rose by 2,000 yen/ton during the same period.

In Taiwan, China Steel Corporation (CSC) raised ex-factory prices for flat steel products twice in May, with hot-rolled coils increasing by NT$1,200 per ton; mainstream quotes at month-end stood at NT$20,700–21,200 per ton. The cumulative price increase for the year has exceeded 25%, and local traders and downstream enterprises generally anticipate further price hikes in June.

South Korea saw hot-rolled coil prices rise for four consecutive months, with a May increase of 20,000 won per ton, bringing the year-to-date cumulative rise to 26%. However, as steel prices continued to climb, downstream procurement became more cautious, and the rate of price growth slowed significantly.

Plate

An acceleration in US infrastructure projects drove a marginal recovery in demand for steel plate, with spot prices rising by $60 per short ton in May. Canadian plate prices also rose for the third consecutive month in May, increasing by C$40–50 per ton, with average spot transaction prices ranging from C$1,550 to C$1,640 per short ton.

The Spanish plate market faced pressure from low-priced material flowing back from France; meanwhile, the cost-effectiveness of imported plate from India and Indonesia dropped sharply due to the combined impact of shipping costs and import tariffs, resulting in limited impact on the domestic market. Two major Italian heavy plate mills experienced consecutive breakdowns in key equipment, leading to a contraction in domestic primary supply; however, traders continued to clear out low-cost inventory accumulated earlier, offsetting the supply gap and keeping spot price fluctuations minimal.

Downstream end-users in the UK have front-loaded their stocking to mitigate supply risks associated with new steel import policies taking effect in July; consequently, heavy plate arrivals are expected to see a temporary surge during May and June. Once the new policies are implemented, import quotas for heavy plates will be drastically reduced, and tariffs on out-of-quota imports will rise to 50%, leading to a sustained contraction in external supply inflows to the UK over the medium to long term.

Supply imbalances are acute in the Central and Eastern Europe (CEE) region: spot supplies of commercial-grade heavy plates are scarce in Poland, as the Częstochowa steel mill has yet to clear its backlog of earlier orders, resulting in continued delays in delivery schedules. The mill recently secured qualification to produce heavy plates for the defense industry; future production resources will prioritize defense orders, further squeezing capacity for civilian-grade heavy plates. Czech rolling mills are also facing raw material shortages, with tight supplies of alternative slabs—both domestic and cross-border—driving up procurement costs significantly.

Japan raised ex-works prices for heavy plates scheduled for June delivery—the first such increase in four years—driven primarily by a recovery in the downstream shipbuilding sector. Heavy plate prices in mainland China are currently at low levels; while supply constraints resulting from short-term environmental production limits and voluntary output cuts by enterprises suggest potential for price increases, weak domestic demand from the manufacturing and infrastructure sectors will limit the upside for steel prices.

South Korea and Taiwan both raised ex-works prices for heavy plates in May, with increases exceeding those for local hot-rolled coils. South Korea raised prices by 30,000 KRW per tonne, while Taiwan increased them by 2,000 TWD per tonne; in both cases, the hikes were driven by rising costs for upstream raw materials, specifically slabs and scrap steel.

Rebar and Wire Rod

Driven by the peak spring season for infrastructure construction, US rebar prices rose by $30 per short ton in May—the second price hike of the year. By the end of May, mainstream quotes for US wire rod ranged from $1,000 to $1,050 per short ton. Import data indicates that U.S. wire rod imports have doubled year-on-year over the past six months, with monthly volume nearing 100,000 tons in April; this influx continues to suppress spot prices in the short term. Although the U.S. initiated an anti-dumping investigation into Algerian wire rod in May, Algeria had already ceased exports to the U.S., meaning the probe has no material impact on the spot market.

Regarding raw materials, U.S. shredded scrap prices remained flat month-on-month in May. Without additional support from shipping costs, scrap prices are likely to enter a downward trend, making it difficult to sustain rising long product prices.

Long product prices in Canada rose across the board in May, with wire rod increasing by C$30–40 per short ton and rebar by C$15 per short ton.

Demand for long products in Northern Europe shows structural divergence: demand for construction rebar remains weak, with a significant drop in demand for infrastructure steel in Germany; conversely, demand for high-carbon wire rod in the machinery manufacturing sector is robust, as downstream enterprises lock in prices and stock up early to hedge against risks associated with new EU and UK tariff policies. The UK represents the weakest market for construction steel in Northern Europe, with end-users concentrating their stockpiling efforts to avoid the impact of quota reductions and a doubling of out-of-quota tariffs for rebar and wire rod scheduled for July.

The Southern European market is also showing internal divergence: demand for construction rebar in Spain and Italy remains steady, with spot prices hitting cyclical highs not seen in nearly two years. Wire rod prices in the region have generally risen due to increased costs and a shortage of imports; however, orders for downstream wire rod processing continue to shrink, indicating no substantial recovery in end-user demand.

Driven by the concentrated start of outdoor construction projects in the spring, long product prices across East Asia have generally risen. Rebar and wire rod prices in Japan have increased for two consecutive months, with each hike amounting to 3,000 yen per ton. However, the sustained rise in steel prices has dampened the willingness to launch infrastructure projects, prompting domestic Japanese steelmakers to voluntarily lower capacity utilization rates to balance regional supply and demand. In Taiwan, rebar prices have risen for four consecutive months, fueling resistance among downstream construction contractors; consequently, Feng Hsin Steel cancelled its planned second round of price hikes in late May. Medium and Small-Sized Sections

In May, US spot prices for structural sections remained flat month-on-month. During the same period, prices for small sections rose by $30–$40 per short ton—the third price adjustment in the past 12 months. Canadian small sections saw their first price hike of the year, with increases ranging from C$70 to C$95 per short ton.

The rise in section prices in Northern Europe is unrelated to construction demand; it is primarily driven by surging regional natural gas and electricity costs, compounded by tighter EU steel import controls that have weakened the competitiveness of low-priced imports from outside the region. The UK is set to drastically cut import quotas for sections in July—with the quota for non-alloy small sections shrinking by 97%—prompting traders to sign long-term supply contracts early to hedge against potential future shortages.

The Spanish section market shows divergent supply-demand dynamics: domestic structural section supplies are tight due to mills prioritizing exports, yet traders hold ample inventory, preventing any significant spot shortages. Price hikes for small sections were more pronounced, rising by €20–€55 per ton. Across Central Europe, end-user demand for sections remains sluggish, but routine maintenance at local mills has contracted supply, driving prices up; mills have successfully passed on raw material costs, further diminishing the cost-competitiveness of imported sections from outside the region.

Price increases for sections across Asia in May were driven entirely by rising scrap costs, with no significant support from demand. In South Korea, prices for structural sections and general small sections rose by 60,000 KRW and 50,000 KRW per ton, respectively. Although South Korea is the largest source of section imports for the US, rising ocean freight rates are expected to reduce export volumes this summer, causing surplus stock to flow back into the domestic market and potentially exerting downward pressure on local spot prices. In China, prices for structural sections and general small sections rose by 110 RMB and 140–150 RMB per ton, respectively, marking the steepest increases in the past 12 months.

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