Mexican domestic wire rod prices dropped US$7/mt in the last two weeks to settle at US$739/mt ex-mill, as demand from housing construction is not encouraging. Sources tell SteelOrbis that home builders will have to change their business model to face the demand challenges.
The fall in demand for new homes in general has been observed since 2009, when it fell to less than 200,000 units, compared to 400,000 units in 2008. According to a study by Standard and Poor's, the decline is expected to continue.
As such, the weakness in demand will force major housing developers not only to restructure their debt, but also their business model. The anticipation of the fall in demand is supported by a drop in sales from the largest developers of almost 40 percent on average.