CME HRC curve gets 'Trump bump' after Turkey tweet

The Chicago Mercantile Exchange's hot rolled coil forward curve got a "Trump bump" today, after the US president doubled the Section 232 tariff on Turkey to 50pc and buyers had to reassess some import availability.

The front-month August contract jumped by $12/st to $910/st, while September moved up by $18/st to $879/st and October rose by $25/st to $847/st. November, meanwhile, rose by $27/st to $825/st.

Forward months on the curve had been steeply backwardated, pricing in the likelihood of resurrected capacity and uncertainty over future policy direction.

Trump tweeted: "I have just authorised a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar!"

Trump said "relations with Turkey are not good at this time". The detention of a US pastor, whom Turkey's president Recep Tayyip Erdogan suspects supported the "Ghulanist coup", has eroded the relationship between the countries.

Previously Trump and Erdogan had a seemingly strong relationship, despite some friction between the countries.

A coil buyer says: "I was legitimately considering buying Turkish CR and HDG this week… Another example of the difficulty in navigating this market."

The sharp reverse in pricing on CME could add another tailwind to volumes, after trade on 8 August spiked, meaning it alone accounted for 59pc of July's total volume. CME cleared 3,098 lots, or 61,960 st, on 8 August.

Turkey sold 73,000t of steel to the US in June.