Market Recovery Signals and Uncertainty Over Tariffs
U.S. steel mills are pushing for price increases following a challenging Q4 2024, where shipments from Nucor, Steel Dynamics (SDI), and U.S. Steel hit a two-year low. U.S. Steel described the quarter as one of weaker demand and falling average selling prices, while Nucor indicated that market conditions were starting to improve.
As of February 7, 2025, hot rolled coil (HRC) prices reached $719 per short ton (st)—their highest level since June 2024 and a 9.77% increase from their July 2024 low. Several mills have begun issuing price hikes, with buyers reporting reduced flexibility in price negotiations.
Will the Steel Price Uptrend Continue?
The steel price rally faces both supportive and restrictive factors:
- Support for higher prices:
- Improved U.S. manufacturing activity – The ISM Manufacturing PMI grew in January 2025 for the first time since April 2024, reaching its highest level since August 2022.
- Supply constraints – Steel production remains suppressed, with mills keeping capacity offline following Q3 2024 maintenance shutdowns.
- Potential headwinds:
- Tariff uncertainty – While the 25% steel import tariffs on Mexico and Canada were paused, Donald Trump announced plans for new 25% tariffs on all steel and aluminum imports, which could disrupt supply and impact demand.
- Buyer hesitation – Steel buyers remain cautious, waiting for longer lead times before committing to large orders.
2025 Steel Price Outlook: Bull Market Likely, But Limited Gains Expected
Looking ahead, three-month HRC futures remain flat, suggesting no strong expectation of a major price rally. Nucor’s Q1 2025 forecast anticipates earnings will be similar to Q4 2024, reflecting ongoing market challenges.
However, SDI CEO Mark Millett remains optimistic, citing:
- Stable steel pricing
- Steady customer optimism
- Increased demand from U.S. infrastructure investments and onshoring initiatives
While demand fundamentals are strengthening, a 2025 bull market is unlikely to match 2021’s extreme peaks, when HRC prices surged to $1,929/st. With mills retaining spare production capacity, prices may rise but not reach historic highs.
Raw Material and Steel Price Movements
- Korean steel scrap: ↑ 7.8% to $153/mt (Feb. 1)
- LME steel scrap (3-month): ↑ 5.71% to $370/mt
- U.S. shredded steel scrap: ↑ 4.58% to $388/st
- Chinese coking coal: ↓ 1.94% to $155/mt
- Chinese steel slab: ↓ 1.95% to $507/mt
With market conditions evolving, steel mills will continue balancing supply and demand to support price increases in 2025.
