Mexican long steel pricing was mostly steady amid reports that Mexican suppliers are increasing sales of long steel to Canadian buyers as a result of ongoing 50 percent export tariffs with the US, Mexican market insiders told SteelOrbis this week.
And while supply in Mexico’s North Region remains reduced as a result of the August 4 shutdown of ArcelorMittal’s rebar facility in Lazaro Cardenas, Mexico, insiders said increased sales to Canada are helping to stabilize Mexican markets even as local demand continues to wane. The key long steel production facility is expected to be offline for 5-6 months.
“The Mexican markets are being supported by Mittal's outage and increased local sales to Canada,” one Mexican long steel insider told SteelOrbis. “Canada has imposed tariffs and quotas on the rest of the world, with the exception of Mexico,” he added. “This is opening important opportunities for us, as we have already sold nearly 50 thousand tons of long steel for September-October delivery in Canada. This is helping support prices in domestic market despite continued sluggish demand.”
The insider estimated that his local sales to Canadian customers via rail and ship from Mexico’s North Region have increased about 400 percent since tariffs went into place in June.
“Our sales to Canada went from about 10 thousand tons a month to about 40-50 thousand tons,” he added. “Yes, with the tariffs, (Mexico) needed a break... and Canada is helping a lot.”
Mexican rebar delivered to Mexico’s North Region is assessed at MXN 14,200/mt ($833.48/mt), little changed from previous MXN 14,141.77/mt ($839/mt), estimates reported two weeks earlier.
In the Mexican wire rod market, pricing is discussed flat this week to rebar at MXN $14,200/mt ($833.48/mt), though sellers continue to seek pricing at MXN 14,500/mt, ($851/mt), up from previous sales at MXN 14,216.10/mt ($843/mt).
“We are aiming at MXN 14,829.34/mt ($880/mt) for wire rod, based on Mittal’s offer, though right now wire rod pricing is a little higher than rebar,” the insider said two weeks ago.
Mexican steel delivered to the US currently is not competitive with domestic producers, since Section 232 steel tariffs between the US, Mexico and Canada were doubled on June 4 to 50 percent, though many industry insiders expect the tariffs to be reduced soon.
Rate $1 = MXN 18.78.
