Mexican Steel market price expected to rise

According to data, over 80% of market participants expect Mexican finished steel prices to rise further in April owing to increasing raw-material costs. Concerns about low demand, on the other hand, are rising, according to respondents.

The index for steel price development increased to 80 from 58.9 in March in a poll of Mexican manufacturers, distributors, traders, and end-customers conducted in early April, suggesting predictions of a high increase (an index of 50 indicates stability).

“Price hikes are being accepted gradually but with reason,” stated a distributor respondent, citing high energy, scrap, and freight costs as the primary drivers, as well as the continuing Russia-Ukraine war.

“There is a substantial decline in demand, and this will arrest the rising trend in pricing in the short term,” said a second dealer who projected a steady market.

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Nonetheless, some market participants believe that, at least for long steel, prices will continue to grow due to insufficient supply and shortages of items such as wire rod. In the next weeks, most participants anticipate increased raw material costs and a minor increase in inventory levels.

The average raw material price sentiment in April increased from 72.8 in March to 79.5 in April. Producers and end-users were less optimistic, with index scores of 76.7 and 73.3, respectively, among distributor and trader respondents.

Expected adjustments in completed steel inventory levels have increased, with the indicator now averaging 57.3, up from 56.7 in March. End-users were the only sector to get an 80 on inventory level adjustments, whereas mills, distributors, and merchants all scored below 60. The steel production index fell to 63.8 in April, down from 65 in March, after three months of gains. At 65 and 64, producers and merchants were the most optimistic. At 60, distributors were the least optimistic.

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