Long steel prices in Mexico’s North Region were reported lower for a second time this month as local end user demand is reported to be continuing to decline, Mexican market insiders told SteelOrbis this week.
Prices were headed lower, insiders said, despite continued reports of high local scrap prices, increased sales to Canada in lieu of continuing US tariff barriers, as well as the recent reactivation of government infrastructure projects.
“I believe the solid Mexican market fundamentals continue to be present as I said previously, though end-user demand is just not there,” remarked one Mexican long steel market insider to SteelOrbis this week after discussing the reduced prices.
This week’s long steel market assessment differs little from one reported two weeks earlier, when rebar pricing moved marginally lower amid initial reports of reduced local demand, while wire rod prices remained steady following earlier price increases as local supplies were constrained.
In the local rebar markets, weekly pricing is reported at MXN 13,900/mt ($759/mt), off from earlier assessments at MXN 13,900-14,100/mt ($753-763/mt), or on average MXN 14,000/mt ($758/mt).
On the supply front, while earlier reports indicated the ArcelorMittal unit would be offline for 5-6 months, on Sept. 4, according to the company’s “technical recovery plan,” rebar and wire rod production as well as DRI output from the plant, is now expected to be at full capacity by the end of November. The company said two of four of the plant’s DRI modules are currently operational. To maintain supply during the outage, the company has introduced several strategic measures, including purchasing hot briquetted iron (HBI) from its sister plant in Texas, maximizing scrap use in production processes, as well as importing slabs from ArcelorMittal, Brazil, to sustain uninterrupted HRC production.
In the Mexican wire rod segment, the SteelOrbis delivered to customer wire rod price average for the North Region stands at MXN 14,200/mt ($775/mt), off from MXN 14,500/mt ($785/mt), two weeks earlier.
Insiders said the combination of the continuing ArcelorMittal plant outage is reducing supply at a time when US markets remain unavailable for export because of 50 percent tariffs. The tariff barrier is prompting Mexico to increase sales to Canada in order to maintain critical cash flow. Recently, Mexican market insiders told SteelOrbis their sales to Canada increased four-fold since US tariffs went into place between Mexico, the US and Canada in June.
In addition to current Section 232 tariffs, insiders say that Mexican supplier Deacero is “even further priced out of the US market” since anti-dumping duties on the steel producer were assessed at 32.05 percent on Sept. 4, bringing total tariffs and AD duties to more than 82 percent.
“The import gap is widening, supporting US domestic mills’ pricing power,” one Mexican import insider told SteelOrbis. “Supply tightness is likely to persist into Q4.”
In the US long steel markets, rebar prices remained steady this past week at $43.50-44.50/cwt.,($870-890/nt or $959-981/mt), while wire rod prices have remain unchanged for nearly three months at $46.50-47.50/cwt.($930-950/nt or $1,025-1,047/mt), even as supply from the recently restarted 700,000-ton Liberty wire and rod plant in Peoria, Illinois is reported to be increasing.
On the tariff front, Mexican steel delivered to the US currently remains non-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 tariff portion of the trade barrier could be reduced once the USMCA trade treaty is renegotiated in mid-2026.
$1 = MXN 18.32 (off from MXN 18.47 two weeks prior)