Mexican domestic wire rod prices plunged US$30/mt in the last two weeks to settle at US$709/mt ex-mill, as the crisis in the housing sector has begun to take its toll on industrial production in Mexico--in particular, the ailing construction industry.
Since last December, Mexican industrial activity entered a gradually shrinking process, but it was during the second quarter of this year when the fall sharpened. Last week, official reports announced that industrial production fell 2.4 percent in June in real terms over the same month last year, even though the market expected a 0.1 percent increase. The contraction was induced, in particular, by the 6 percent decline in production from construction industry, the largest monthly drop since January 2010. This, in turn, exacerbated the decline in building activity, which fell 7.5 percent in June.