Earlier today, the Trump administration announced it planned to lift the Section 232 steel tariffs against Mexico and Canada, and many involved in buying and selling Mexican API X-52 line pipe question whether Mexican mills will keep prices lateral, or reduce them.
Prices out of Mexico (FOB Texas), with the tariff, have largely trended alongside US domestic prices, which are still in the range of $60-$63 cwt. ($1,323-$1,389/mt or $1,200-$1,260/nt), ex-mill.
Although some sources believe that Mexico “will be able to compete much better without the 25 percent tariff,” others believe that they’ll continue to sell to the US at a rate that’s “based off what our domestic market is doing. They’ll compete just like they did before Section 232, which meant selling at a slight discount to what the US mills are offering.”
Another source sees the situation differently. “If they have extra capacity, they will reduce prices,” the source said. “It’s as simple as supply and demand. The question is how much are they willing to give back? “