Mexican rebar prices stable on stronger peso, lackluster demand

Mexican rebar rates continued to be approximately unmodified via September despite regional manufacturers' relentless initiatives to enhance them, market resources there claimed Monday.

As arrangements in the greater end of the rate variety are obtaining a lot more scarce, Platts tightened its Mexican domestic rebar regular monthly analysis to Peso 9,300-9,500/ mt ($ 545-556/ mt) supplied, leaving out the obligatory IVA tax obligation for quality R42 item, from Peso 9,300-9,700/ mt at end-August.

Back then, market sentiment was that the mills' price walking could at the very least partly succeed as there was a solid stress from the currency exchange rate; the US buck reached an all-time high of Peso 17.18 in the last week of August.

Greater than just lowering competitiveness of imported material, the high dollar pressures rebar price up through increased costs of imported ferrous scrap, the primary basic material used by Mexican lengthy steel producers.

" When the [US] Federal Get made a decision not to elevate the rates of interest, the dollar calmed down," claimed a supplier that reported acquiring 20 mt in the second week of September at Peso 9,400/ mt.

In addition to the money exchange price, consistent bad demand is also putting a break in steelmakers' goal of boosting cost.

" Large construction jobs are quit, so we are not receiving large orders," said the distributor. "As well as September generally is a slow-moving month."

A 2nd distributor said mills are working out directly with many end customers, which increases competitors and also tightens margins. bhmt chemical stopped marketing rebar to concentrate in various other structural products.

" My last rebar acquisition was last month, when I purchased 150 mt at Peso 9,300/ mt-- just since I already had a consumer for that," he stated.

Strong competition in a slow market was likewise noted by 3rd representative resource that supposedly lowered his rebar shipments "by 40%. We are not competing in costs, we are only marketing to those end individuals who pay our cost," he claimed. "There are a great deal of restrained jobs, and the larger projects, for volumes over 3,000 mt, are buying straight from a certain producer. His last purchase was 2 months earlier at Peso 9,200/ mt.

A source from a manufacturer strengthened the business's purpose to sell rebar at costs "over Peso 9,500/ mt" and claimed there were some offers at Peso 9,800/ mt. Nevertheless, he identified that end individuals such as "building and construction companies as well as government have a little far better costs since they pay anticipated."

Mexico's domestic rebar suppliers include Deacero, Ternium, Simec, Talleres y Aceros, Gerdau Corsa and also ArcelorMittal.