Mexican longs mills have continued push prices up due to rising raw material costs; however, demand may not be strong enough yet for customers to expect accept any further price increases in the near future.
Since mid-July, Mexican longs prices have been fluctuating up and down amid a very weak domestic demand, as mills have repeatedly attempted to raise prices based on increases in raw material costs, only to see prices fall back again due to the weak demand. But ultimately, Mexican longs mills were finally able to push through their July scrap-based hikes. Now, further scrap increases are expected and mills are expected to again try to raise their prices. Nevertheless, the market may not be ready for further hikes.
Since mid-July, Mexican rebar offers have been rising and falling slightly on an almost weekly basis but mostly hovering around the price range of about Peso 7,700 to 8,000/mt (US$586 to $609/mt) delivered to the customer, plus taxes. Looking back, during mid-July, Mexican rebar mills increased their offers from the levels of Peso 6,400 to 6,700/mt delivered to the customer and including taxes, to a new level of about Peso 7,800 to 8,000/mt (delivered to customer’s yard and including taxes).
Mexican domestic wire rod offers have also increased based on the July scrap price hikes. At the beginning of July, offers of low carbon wire rod in the domestic Mexican market could be found at around Peso 6,600/mt delivered to the customer, while they have since risen to approximately Peso 8,450 to 8,600/mt (US$645 to $655/mt) delivered to customer.
On the demand side, activity from the Mexican construction industry remains mostly muted, though firms have noted a slight pick-up in activity in recent weeks. Nevertheless, many planned construction projects remain on hold due to the economic conditions. Furthermore, many rebar distributors continue to sell at under the mill price in order to liquidate their high inventories.
The trend for domestic rebar and low carbon wire rod offers in Mexico continues to be slightly up, as scrap prices are expected to continue increasing in the near future, while demand should continue to improve in the coming weeks, though not sharply.