Prices for Mexican domestic hollow structural sections (HSS), referenced ASTM-A500, plunged sharply in the last two weeks, by about US$109/mt. The new price level of US$903/mt ex-mill is attributed to the discrepancy between demand and production. During the first quarter, demand for HSS grew a mere 1.7 percent while production increased 23.4 percent--a similar discrepancy has been seen in Q2, as figures should eventually show. With inventories at mills so high, prices have been slashed to garner orders, although sources say prices should bounce back soon--construction activity was tepid in Q1 going into Q2, but the announcement of the National Infrastructure Plan should spur construction in the near term.
Steel industry specialists expect an investment of US$416 billion as a result of the government's investment and the new Law on Public Private Partnerships (APP's). This would amount to 6 percent of GDP, double from the previous administration.
"I would give a better global positioning to Mexico, which currently ranks 73 in infrastructure of the World Economic Forum" financial sources said.