US Midwest hot-rolled coil steel futures traded on the CME, denominated in USD. It is the counterpart to HRC_CN, which trades on the Shanghai SHFE in RMB.
AI and reshoring demand support steel, but Chinese oversupply caps gains
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AI infrastructure drives steel demand AI data centers need heavy structural steel for server racks, floors, and cooling. With 831 projects under construction globally, this new demand supports US HRC prices, especially for modern electric-arc producers like Nucor and Steel Dynamics.
This is a major new source of demand that lifts steel prices.
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Capital shifts to real economy, boosting steel A strategist says US capitalism is moving from buybacks to building real assets like steel, copper, and power. This reshoring and supply-chain trend means more investment in steel capacity and higher demand for US HRC.
It signals a broad shift that increases steel demand and investment.
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USMCA talks create tariff uncertainty US and Mexico will hold a fourth round of USMCA talks in September. Progress on steel trade is positive, but unresolved issues like Section 232 tariffs (50% on steel) and US content rules keep uncertainty high, which can sway steel prices both ways.
Trade policy directly affects steel flows and prices, and the outcome is unclear.
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Chinese oversupply weighs on steel prices Thailand's construction material index shows steel prices fell 0.6% in August due to excess Chinese supply. This global glut, with projected excess capacity of 745 million tons by 2028, pressures US HRC prices by keeping a lid on global benchmarks.
It is a key counterweight that limits price gains from demand.
Q3 2026
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AI and reshoring demand support steel, but Chinese oversupply caps gains
▲
AI infrastructure drives steel demand AI data centers need heavy structural steel for server racks, floors, and cooling. With 831 projects under construction globally, this new demand supports US HRC prices, especially for modern electric-arc producers like Nucor and Steel Dynamics.
This is a major new source of demand that lifts steel prices.
▲
Capital shifts to real economy, boosting steel A strategist says US capitalism is moving from buybacks to building real assets like steel, copper, and power. This reshoring and supply-chain trend means more investment in steel capacity and higher demand for US HRC.
It signals a broad shift that increases steel demand and investment.
◆
USMCA talks create tariff uncertainty US and Mexico will hold a fourth round of USMCA talks in September. Progress on steel trade is positive, but unresolved issues like Section 232 tariffs (50% on steel) and US content rules keep uncertainty high, which can sway steel prices both ways.
Trade policy directly affects steel flows and prices, and the outcome is unclear.
▼
Chinese oversupply weighs on steel prices Thailand's construction material index shows steel prices fell 0.6% in August due to excess Chinese supply. This global glut, with projected excess capacity of 745 million tons by 2028, pressures US HRC prices by keeping a lid on global benchmarks.
It is a key counterweight that limits price gains from demand.
News & notes movingSTEEL.COMM
MexicoUnited States
Critical Materials & Supply Chain▲
Mexico Pushes US to Cut Tariffs on Steel, Aluminum and Autos
Mexican Economy Minister Marcelo Ebrard said Mexico is pressing the United States to reduce import tariffs on steel, aluminum and automobiles, as trade negotiations between the two countries continue. Ebrard said that although trade relations between the two countries have made progress and he has spoken with US Trade Representative Jamieson Greer almost daily, talks to lower the tariffs the US collects under Section 232 of the US Trade Expansion Act have not yet reached a conclusion. Currently, the US imposes a 25% tariff on imports of passenger cars and light trucks, with qualifying vehicles from Mexico taxed only on the value of parts produced outside the United States. As for the 50% tariffs on steel and aluminum from Mexico set by the government of President Donald Trump, the two countries are negotiating to reduce or eliminate them. Ebrard said Mexico must also monitor additional trade measures from the US government, especially those related to the problem of excess capacity, and noted that the Section 301 tariff issue stemming from excess capacity was not raised at Thursday's meeting between the two countries, with Mexico awaiting a decision from the United States. Ebrard stressed that preserving Mexico's standing in the US market remains the top priority, with official data showing that the United States was the destination for about 85% of Mexico's non-oil exports in the first eight months of this year.
ALUMINUM · Tariff · Positive Mexico is negotiating to cut or eliminate the 50% US Section 232 tariffs on aluminum from Mexico, a positive for aluminum trade.
STEEL · Tariff · Positive Mexico is pressing the US to reduce or eliminate the 50% Section 232 tariffs on steel from Mexico, which would support US HRC steel trade flows.
28 Countries and Regions Including Japan, US and Europe Agree on Common Framework to Monitor Steel Transshipment
Japan, the United States, Europe and 25 other countries and regions held a ministerial meeting on September 30 and agreed on a comprehensive framework to monitor "transshipment" of steel routed through third countries. The measure is aimed at China, and will gather information such as which country performed the melting and casting, and ensure transparency in distribution channels. They will share information on the place of production, work to build and strengthen a monitoring system for steel imports, and exchange information on trade suspected of being transshipment in order to address it. To deal with the damage to domestic steel industries from the inflow of cheap steel products, they will take measures such as anti-dumping measures and countervailing duties when appropriate. The 28 countries and regions adopted a ministerial statement at a meeting held alongside the Group of 20 trade ministers' meeting, warning that government subsidies and the like "protect unprofitable production capacity that would otherwise be forced to exit by market forces, distort trade, and weaken market-based producers around the world."
STEEL · Tariff · Positive 28 countries agree to monitor steel transshipment and apply anti-dumping/countervailing duties targeting cheap Chinese steel, supporting US HRC steel prices by curbing imports.
Trump Announces Plan for $15 Billion Steel Plant, Largest in US History
President Donald Trump announced plans to invest in a steel production plant that would be the largest in US history, with an investment of approximately $15 billion. The announcement was made jointly with Mesabi Metallics in the Oval Office at the White House on Monday, September 28, just weeks before the midterm elections in November. Mesabi Metallics, headquartered in Nashwauk, Minnesota, said the project will deliver 100% American steel, with mining, smelting, and casting carried out in Minnesota and Iowa, and aims to begin production in 2030. The White House estimates that the first phase of the Iowa plant will produce about 7.5 million tons of steel per year, supporting up to 6,000 construction jobs, with plans to eventually expand capacity to 10 million tons per year, along with at least 1,750 permanent jobs. The plant will use iron ore from Mesabi's mines in Minnesota's Iron Range, a project worth more than $2.5 billion that has just begun production after about 20 years of development and past setbacks, including the bankruptcy filing of Essar Steel Minnesota in 2016. Mesabi is part of Essar Group, an Indian multinational conglomerate.
Cleveland-Cliffs Falls 8% as Stelco Idles Ontario Plant Over US Tariffs
Cleveland-Cliffs Inc. shares tumbled nearly 8% in late Monday trading after reports that its Canadian subsidiary, Stelco Holdings Inc., plans to halt operations at a key Ontario processing facility. According to a letter to customers obtained by Bloomberg News, Stelco expects to indefinitely idle its cold-rolled and coated operations at Hamilton Works in the coming weeks, with the wind-down scheduled to begin on Oct. 9 and expected to result in approximately 350 job cuts, according to local reporting from the Hamilton Spectator. The curtailment comes as Canadian steelmakers face pressure from a 50% U.S. tariff maintained under Section 232 of the Trade Expansion Act, which Stelco said Ottawa's countermeasures proved insufficient to offset. To mitigate the fallout, Cleveland-Cliffs is shifting primary manufacturing focus to its more integrated Lake Erie Works facility in Nanticoke, Ontario, and Cliffs spokesperson Patricia Persico said in an emailed statement to Bloomberg that total steel output will remain unchanged even as the product mix pivots toward a higher concentration of hot-rolled coil. Stelco said it will honor existing customer orders during the transition while maintaining full capacity for hot-rolled steel deliveries.
CLF · Tariff · Negative Stelco, its Canadian subsidiary, is idling Hamilton Works cold-rolled/coated operations due to the 50% US Section 232 steel tariff, cutting ~350 jobs.
Stelco Holdings Inc. · Tariff · Negative Stelco is indefinitely idling its Hamilton Works cold-rolled and coated operations, cutting ~350 jobs, as the 50% US tariff outweighs Ottawa's countermeasures.
STEEL · Tariff · Positive The 50% US tariff curbing Canadian steel supply and Stelco's idled coated/cold-rolled output tightens US HRC supply, supporting domestic hot-rolled coil.
Commerce Ministry reports construction material price index jumped 6.1% in August 2026, led by electrical and plumbing category up 12.7%
Nanthapong Jiralertpong, Director of the Office of Trade Policy and Strategy, disclosed that the construction material price index in August 2026 stood at 113.1, up 6.1 percent compared with August 2025, continuing to expand on the back of still-tense geopolitical conflicts that have kept oil and energy prices volatile at high levels and affected production and logistics chains, pushing the price index higher in almost every category. The category posting the largest increase was other construction materials, up 15.7 percent on asphalt and natural material prices, followed by electrical and plumbing equipment, up 12.7 percent on world copper prices that continued to rise amid demand from infrastructure, the clean energy industry, and advanced technology. Concrete products rose 9.6 percent, wood and wood products rose 4.5 percent, tiles rose 4.0 percent, sanitary ware rose 3.7 percent, and surface coating materials rose 1.7 percent. Categories whose prices declined were steel and steel products, down 0.6 percent on excess steel supply from China, and cement, down 0.2 percent on intense market competition. Nanthapong added that the construction material price index in September 2026 is expected to continue expanding, with prices of wires and electrical equipment likely to rise on copper prices amid tight supply after copper mines in Chile and Peru were affected by natural disasters, together with rising copper demand for infrastructure construction and data center construction to support the continuous expansion of artificial intelligence technology. At the same time, demand for construction materials to repair roads, buildings, and housing after disasters is another factor supporting the index's continued expansion.
Energy Transition & Power Demand › Grid, Transmission & Power Equipment ▼Pricing
Energy Transition & Power Demand › Solar ▼Pricing
COPPER · Demand · Positive World copper prices rising on infrastructure, clean-energy, and data-center demand, with tight supply after Chile/Peru mine disruptions, supports copper futures.
STEEL · Supply · Negative Steel and steel product prices fell 0.6% on excess steel supply from China, pressuring US HRC steel.
Industry Minister to propose Cabinet elevate four coated steel sheet standards to controlled goods
The Ministry of Industry is preparing to propose to the Cabinet that four coated steel sheet standards be elevated from voluntary standards to controlled goods, in order to block cheap, low-quality imported steel and address dumping that affects Thai producers. The measures are expected to take effect by early 2027. Mr. Warawut Silpa-archa, Minister of Industry, said the four standards are TIS 2131-2567 for pre-painted hot-dip galvanized steel, or PPGI; TIS 2753-2567 for pre-painted hot-dip 55 percent aluminium-zinc alloy-coated steel, or PPGL; TIS 2981-2567 for ZAM steel; and TIS 3059-2567 for zinc-aluminium-magnesium alloy-coated steel. They will apply to both imported and domestically produced goods, which must pass strict quality tests such as salt spray resistance of up to 2,000 hours, paint strength and adhesion, impact resistance, solar reflectance, as well as tensile strength and yield stress. Operators with existing licences can switch immediately from a Form 2 licence to a Form 4 licence without factory inspection or new sampling, to reduce burdens and avoid affecting those already complying with the standards. Mr. Warawut insisted this is not blocking imports, but creating the same rules so that all parties compete on quality.
Yuanta Securities says HPG jumps on steel recovery, 46% upside
Yuanta Securities stated that HPG, one of the largest steel producers in Southeast Asia, is benefiting from reduced Chinese steel supply following the Anti-Involution policy, while hot-rolled coil prices in Vietnam have begun to rebound, creating positive sentiment and short-term speculative interest. Profit in 2026 is expected to grow 60% year on year, according to Bloomberg Consensus, driven by the opening of the Dung Quat 2 plant and a full year of capacity recognition, lifting steel production capacity by 40% from the previous year. The current price trades at a 2026 price-to-earnings ratio of only 7.9 times, with Bloomberg Consensus giving a target price of 4.08 baht per DR, implying 46% upside.
Watch for the new TIS steel standard hearing on 17 August; Prawit champions a single standard
Mr Prawit Horrungruang, a director of the Standard Long Steel Association, said that on 17 August there will be a public hearing on the new draft steel standard of the Thai Industrial Standards Institute, or TISI. He stressed that revising the standard is not about blocking operators, but about creating a single standard to raise the country's long-term competitiveness. He also pointed out that the key issue for induction furnace, or IF, smelting plants should not be which country the technology comes from, but the ability to control quality, product consistency, and safety, especially for steel used in building structures and infrastructure that affect people's lives. Mr Prawit also cited lessons from the steel crisis during the 1997 IMF period, saying Thailand should not let history repeat itself, and that raising the standard for IF steel is a major challenge for the Thai steel industry. A good standard, he said, must give the public confidence that every bar of steel leaving a factory comes from a reliable production and quality-control system, not just from a few samples that pass testing.
JFE Targets Growth Markets in the U.S. and India, Differentiating with High-Grade Steel
JFE Holdings is focusing its steel business on the United States and India. In the U.S., it operates two joint ventures with Nucor, the largest electric arc furnace steelmaker, and President Yoshihisa Kitano highlighted high-grade steel categories such as electrical steel sheets and automotive steel sheets as key areas. In India, JFE invested 270 billion yen in a subsidiary of JSW Steel, fully participating in the operation of a steel plant with an annual crude steel production capacity of 4.5 million tons, and is eyeing expansion to 10 million tons by 2030 and further to 15 million tons. India's per capita steel consumption is around 100 kilograms per year, and President Kitano sees future motorization and electrification as the keys to growth.
5411.JP · Demand · Positive JFE targets growth in U.S. and India, investing in JSW Steel and expanding capacity, driven by demand in motorization and electrification.
NUE · Demand · Positive JFE's U.S. JVs with Nucor focus on high-grade steel, indicating strong demand for Nucor's products.
STEEL · Demand · Positive Growth in steel demand in U.S. and India may support HRC futures prices.
US and Mexico Schedule Fourth Round of USMCA Talks for Early September
The United States and Mexico are set to hold a fourth round of negotiations to review and update the United States-Mexico-Canada Agreement, or USMCA, in early September. This follows the third round of talks this week, which made progress on some issues, but both sides still have differences on key points that could prolong negotiations into next year. The latest round took place between US Trade Representative Jamieson Greer, Mexican President Claudia Sheinbaum, and Mexican Economy Minister Marcelo Ebrard. Ebrard said the discussions were constructive and advanced on steel and aluminum trade, as well as approaches to reduce reliance on imports from Asia. One unresolved issue is the US proposal that cars qualifying for tariff preferences under USMCA must have at least 50 percent of parts made in the United States, which Mexico firmly rejects. Meanwhile, Mexico is calling on the US to ease national security tariff measures under Section 232, which currently impose a 25 percent tariff on auto imports from Mexico and Canada, and a 50 percent tariff on steel and aluminum.
ALUMINUM · Tariff · Neutral USMCA talks progress on steel and aluminum trade, but unresolved issues like Section 232 tariffs and US content rules create uncertainty for aluminum demand and pricing.
STEEL · Tariff · Neutral USMCA talks progress on steel and aluminum trade, but unresolved issues like Section 232 tariffs and US content rules create uncertainty for steel demand and pricing.
Wellington-Altus strategist says U.S. capitalism shifting from buybacks to real economy
James Thorne, chief market strategist at Wellington-Altus, argued that the center of gravity in U.S. capitalism is shifting from financial engineering back to the real economy. He said the post-2008 playbook of low capex and high buybacks is colliding with a new reality built around reshoring, energy security, supply-chain resilience and AI infrastructure. Thorne pointed to Treasury Secretary Scott Bessent’s view that every nation should control the essentials of national supply, emphasizing resilience over autarky. The investment implication is that capital is moving into physical capacity such as concrete, steel, copper, power, logistics and machinery, rather than pure balance-sheet engineering. Thorne warned that investors clinging to the low-capex, high-buyback model are betting on a shrinking productive base, and the better opportunity lies in companies and sectors building the real economy.
VanEck Steel ETF Hits 52-Week High on AI Infrastructure Demand
The VanEck Steel ETF reached a new 52-week high earlier this month, driven by surging demand for steel in artificial intelligence infrastructure. The fund returned an average of 47.2% annually in 2025 and attracted $81.41 million in inflows over the past year, pushing assets under management above $203 million. AI data centers require heavy structural steel for server racks, reinforced flooring, and cooling systems, with 831 data center projects under construction globally as of March 2026. Despite a 0.3% year-over-year drop in global crude steel production in May 2026 and projected excess capacity of 745 million tons by 2028, the fund's top holdings like Nucor and Steel Dynamics operate modern electric arc furnaces that can adjust output while commanding premium prices for AI-grade steel. Near-term quantitative models assign a 65% probability of SLX outperforming the broader ETF universe, though risks include easing trade tariffs or a slowdown in AI capital spending.
