A price hike announced by Mexican long steel producers at the end of July for all August rebar steel orders did not fully materialize as some negotiations are still being seen at July prices, sources said Friday.
However, pressure from a rising exchange rate -- which impacts the price of scrap, especially that imported from the US -- is pushing the rebar price higher, despite persistent poor demand. On Wednesday, US dollar reached an all-time high of Peso 17.18.
As a result of these negotiations and the outlook, Platts raised its Mexican domestic rebar monthly assessment to Peso 9,300-9,700/mt ($555-$579/mt) delivered, excluding the mandatory IVA tax for grade R42 product, from the Peso 9,300-9,500/mt assessment at the end of July.
"I believe mills will announce a hike in early September, independently of consumption, because of the exchange rate," said a service center source who was seeing offers at Peso 9,800/mt, but said they were easily discounted to Peso 9,500/mt. To get this price, however, "you need to be quick," he said.
A producer source said the company's floor is currently Peso 10,000/mt. "Some deals of small volumes were closed at this level," he said, adding that he saw invoices from a competitor at Peso 9,500/mt.
The exchange rate did not "impact us, because there are no imports of rebar [in Mexico], only of flat steel. There is still oversupply, that's why the hikes didn't materialize," said a distributor who reported purchasing 120 mt in the last week of August at Peso 9,300/mt, "despite the price lists of up to Peso 10,200/mt."
The possible adoption of new tariffs in the steel sector, which is being discussed by Mexico's Economy Secretariat and the local Canacero steel trade association, could also help mills to boost prices, said a second distributor. "Anyway, the price is still at Peso 9,300/mt. I believe it may reach Peso 9,800/mt," he said.
Mexico's domestic rebar suppliers include Deacero, Ternium, Simec, Talleres y Aceros and Gerdau Corsa, along with ArcelorMittal.
Source; Platts
- metaljunction »
- Metal News
Metal News & Events
METALJUNCTION PUBLICATIONS
Coal Insights (English) Monthly
![Steel Insights](/assets/images/news/coal-insights.jpg)
Coal Insights is a ready reckoner for anyone associated with coal. This publication is aimed at tracking everything related to coal in India.
India Coal Market Watch(English) Monthly
![Steel Insights](/assets/images/news/ICMW_Jan09.gif)
ICMW is a one-stop source for all news, data and research pertaining to coal demand, consumption, stocks, spot- and long-term prices with respect to the Indian Market.
India Steel Market Watch (English) Monthly
![Steel Insights](/assets/images/news/ISMW.gif)
ISMW is a brand new high-end steel market report, covering all aspects of the steel industry in India.
Steel Insights(English) Monthly
![Steel Insights](/assets/images/news/SteelInsights.jpg)
Steel Insights delves into various facets of the domestic and global steel industry such as market fundamentals, raw material price trends, price forecasts etc.