Although Mexican domestic rebar mills tried to push through a substantial US$33/mt price increase last week, market conditions did not justify it and so prices have remained in the level of US$787/mt ex-mill. In the next few weeks, sources tell SteelOrbis that prices might even start to decline, anywhere in the range of US$15-$20/mt.
Compounding the situation is a reported surplus of 2.5 million mt of rebar in the market, which could increase with the entry of new mini mills and other large plants like DeAcero in Ramos Arizpe, Coahuila.
Clusters of demand for rebar in strategic regions such as Bajio (where housing and infrastructure are required for employees of new auto plants) will help with the surplus, but it might not be enough to affect prices in the near-term.