The Mexican domestic longs market has slightly increased in the past week as mills have continued pushing for higher prices and supply has become tighter.
Mexican longs mills once more have tried increasing their rebar prices to about Peso 8,500/mt (approx. US$660/mt); however, the market continues to be weak as demand has not improved. Spot offers are going for less than what mills are asking for, and the fact that distributors continue selling at lower prices continues offsetting the upward pressure from the mills. Nevertheless, as ArcelorMittal's Mexican longs operations are being affected by the current strike at its Lázaro Cárdenas mill, the firm has decreased longs output by about 4,600 mt per day, thus diminishing the amount of product available in the marketplace and allowing spot offers to rise.
Spot offers in the domestic Mexican rebar market are at about Peso 8,000 to 8,200/mt (US$621 to $637/mt) delivered plus taxes, slightly higher than the level seen last week of Peso 7,700 to 8,000/mt.
Wire rod offers have also slightly gone up from the levels seen at the beginning of the month of Peso 8,500 to8,600/mt (US$645-655) delivered to customer to a current level of Peso 8,600-8,800/mt (US$668 to $683/mt).
The trend for the longs market in Mexico is still slightly up due to the aforementioned tightening of supplies and the upward price pressure from the mills. However, the market probably won't be able to register any major increases in the near future as scrap prices seem to have stabilized and overall demand remains weak.
However, there are some important construction projects ready to be launched, which will help improve longs demand to some degree. One such project is the construction of the Punta Colonet port, which was announced this week by Juan Molinar Horcasitas, the spokesperson of the Mexican Department of Communications and Transportation. Punta Colonet will compete with Long Beach and Los Angeles ports as it will be built 140 kilometers away from Ensenada in northern Mexico near the San Diego border. Construction is slated to begin in September.