Mexican flat steel producers have stepped back from price increases they announced months ago and lowered prices for hot- and cold-rolled products, as well as for galvanized, local service center executives said Friday.
The increase of Peso 500/mt the mills wanted did not stick because the prices of imported material continued to shrink, a source said.
"Flat-rolled products, especially from China, keep being delivered in Mexico at very low costs. That's why it was not possible for the Mexican producers to continue with their plan to raise prices here," he said.
The price reduction by the mills "did not make a lot of sense," another source said.
"I didn't understand this move. Despite the imported material, demand for domestic products was stable. Purchases at my company had a slight increment in the end of the third quarter and the local mills are currently delivering the materials with no delay," he said.
The price reduction brought prices to about 2%-3% below previous values, before the attempt to increase prices.
That means HRC is being traded at Peso 9,220-9,350/mt ($552-$560/mt), CRC at Peso 10,680-10-800/mt and hot-dip galvanized at Peso 12,140-12,350/mt.
Mexican steel prices are usually negotiated on a delivered basis for distances up to 200 km, excluding the mandatory value added tax. The exchange rate was Peso 16.49/$1 on Thursday.
Another executive said "the drop in prices for Mexican scrap could have helped, somehow, this scenario." The source said carbon steel scrap is "easily found at around Peso 2,000/mt," but did not detail the type of scrap.
Local steelmakers do not comment on their pricing policies.
