Will US HRC steel prices average above $750/ton in H2 2026?

HRC is currently around $800+/ton with Section 232 tariffs (25%) and anti-dumping duties creating a pricing floor. These protections have survived an administration change and the current administration has expanded trade protections. The primary risk is new domestic capacity coming online, which could pressure prices downward. However, $750 is a moderate threshold — HRC has been above $700 for most of the post-2020 period with tariff protection. Fabrication demand backlogs extending through 2026 and infrastructure spending provide demand support.

The $750 threshold is well below current levels but steel pricing is cyclical. The FY2025 experience showed flat roll margin compression even with record shipments. New domestic HRC capacity entering the market could create supply overhang that pressures prices toward $700-750 range in a soft demand environment. However, trade protections create an import price floor that supports domestic pricing. The average should remain above $750 unless there is a demand shock or material trade policy change. Economic slowdown risk is the primary threat.

Steel pricing follows a mean-reverting pattern. Post-tariff HRC has generally traded in the $600-1,000 range, with the $750 level roughly in the middle. Current pricing at $800+ and tariff protection suggest the floor is above $600. For the average to fall below $750, HRC would need to spend significant time below $700 during H2 — possible in a recession scenario but not the base case. The infrastructure spending tailwind (IIJA) and reshoring trends support steel demand through 2026. Construction backlogs (extending through 2026 per STLD) add demand visibility.

HRC pricing above $750 is currently the status quo with ~$50 of cushion. But H2 2026 is 3-9 months away, and steel pricing can move $100-200 in a quarter. New domestic capacity is the biggest concern — if it comes online in 2026, it adds supply that could depress pricing, especially if demand softens simultaneously. The combination of new supply + potential economic slowing could push prices toward $700-750. I assign slightly above coin-flip odds because trade protections are strong but I respect the cyclicality risk.

Section 232 tariffs have created a structural floor under domestic HRC pricing since 2018. The tariff effectively adds $150-200/ton to import costs, making domestic pricing below $700 unsustainable for most imports. This floor, combined with current pricing above $800, means HRC would need a significant demand shock to average below $750 for a full half-year period. While individual months could dip, the average is more stable. Anti-dumping victories removing 1M+ tons of competing imports further support pricing.

The base case is HRC remaining above $750 given tariff support and current demand levels. The bear case (HRC below $750 average) requires either: (1) economic recession reducing steel demand, (2) significant new domestic supply coming online simultaneously, or (3) trade policy weakening. None of these is the most likely scenario but they are not negligible either. Probability of 60% reflects moderate confidence that the favorable pricing environment sustains through H2 2026.

Trade protections create a pricing floor. Current HRC ~$800+ with $50 cushion. New capacity is a risk but $750 average for H2 is moderate threshold. Most likely HRC stays above $750 unless recession hits. Infrastructure spending supports demand.

Steel pricing is cyclical and can move quickly. New domestic capacity entering in 2026 adds supply that could pressure prices. However, 25% tariff creates structural import floor. The 6-month average smooths volatility. More likely above than below $750 but genuine uncertainty exists about economic conditions in H2.

Current pricing, tariff floor, and demand backlogs support above-$750 outcome. New capacity and cyclicality risk create meaningful downside. Balance of factors favors YES but with moderate rather than high confidence. 60% probability reflects that current conditions support the threshold but could deteriorate.