Aug. 19 reports of a US-Canada framework cutting steel and aluminum tariffs from 50% to 25% knocked down CME Midwest HRC futures, with the front end of the curve selling off most sharply.
Canada’s importance as a US supplier means cheaper import economics immediately ease the scarcity premium built into nearby contracts, even before additional physical tons arrive.
The curve is still backwardated, and deferred 2027 contracts moved far less, showing traders are revising near-term supply expectations more than their longer-run HRC outlook.
Money-manager net length had already fallen 34% to 9,344 contracts from a March peak of 14,082, leaving room for further long liquidation if the deal is finalized.
Unresolved terms, possible setbacks in talks, and pressure on Mexico to seek similar relief could keep HRC futures volatile and deepen the bearish effect if tariff cuts spread across North America.