The Mexican long product market continues to be depressed due to the stark economic problems the country faces.
Mexico's domestic rebar offers have remained at the same low levels as last week, while wire rod offers have fallen slightly further due to the continued weak demand and high inventories at both the mill and distributor levels.
Rebar offers in the Mexican domestic market are still ranging at the same level seen a week ago, of about Peso 6,400-6,700/mt (US$488-$511/mt) delivered to the customer and including taxes.
Offers of low carbon wire rod in the domestic Mexican market can be found at around Peso 6,600/mt (US$504/mt) delivered to the customer, while a week ago they were slightly higher at Peso 6,800-7,000/mt delivered.
Mills had been planning to raise prices in June, yet the lack of demand stopped them from doing so. Despite the good amount of optimism in the market from April to early June, the trend for Mexico's rebar and wire rod prices has been downward in recent weeks as conditions in the marketplace continue to be bleak. Mexico's economy shrank by a staggering -8.2 percent in the first quarter from the same period last year, and for the full year, Mexico's economy is now projected to shrink by at least six percent, which is far more severe than the -1.8 percent contraction expected for Latin America as a whole and will be Mexico's largest GDP contraction since 1995.
Exports to the stronger markets in Central America remain the sole bright spot for Mexican longs right now, while domestic demand continues to disappoint, as does demand from its biggest trading partner, the US.
Carlos Maiz Garcia, chairman of the Mexican Bureau of the Construction Industry (CMIC), said this week the construction sector in Mexico is facing uncertainty as people are hesitating to buy houses and businessmen are reluctant to invest in commercial property. He also said that despite the uncertain environment, construction projects are still taking place, though at a slower than normal pace.