Mexican longs prices generally remain stable, though at lower-than-desired levels of producers, as demand continues to be weak amid increased scrap prices.
Most transactions in the domestic Mexican rebar market continue to range from about Peso 8,000 to 8,200/mt ($US587 to $601/mt) delivered, plus taxes (15 percent). Domestic low carbon wire rod transaction prices in the Mexican market are also unchanged from last week and range from Peso 8,500 to 8,800/mt (US$623 to $645/mt) delivered, plus taxes. However, these spot prices are below the asking prices mills tried to raise prices to in late August. Furthermore, on a dollar basis, prices have actually dropped slightly in the last week due to recent weakening of the Mexican Peso to the USD.
As regards Mexico's domestic longs demand, things seem to have bottomed out, but no major resurgence is expected as the economy remains depressed. The National Institute of Statistics and Geography (INEGI) reported Monday that the Mexico's construction activity declined in June by six percent compared to the same month last year, yet increased 0.05 percent compared to May.
The overall price trend for Mexican longs is still sideways as demand is weak, but no longer worsening, while scrap prices continue to inch upwards. However, if scrap prices keep rising and mills and rebar buyers remain unwilling to accept any price hikes, producers' margins will come under increasing pressure.