Mexican steel prices expected to remain steady in June: Commodity Insights survey

The sentiment for price changes in June remained bearish June 10, with producers being the only market participants expecting higher prices, while all others anticipated price decreases, data from the monthly S&P Global Commodity Insights steel sentiment survey showed.

The steel price development index remained at 48.4, with producer respondents having an average index of 53.3. A stability index of 50 indicates no expected change in prices.

"We expect demand in the market to remain low and for steel prices to either remain stable or experience a very marginal decrease," respondent said.

A second respondent agreed: "There is a perceived stability in prices with a slight tendency for them to decrease."

The volatility of the US dollar exchange rate has also been identified as an important factor in price expectations, with some respondents suggesting that it can significantly impact price stability or even lead to price increases.

There were 71 respondents, including service centers, distributors, profile sellers, producers, scrap dealers, consumers and traders.

The long products market had a higher price development index of 54.7, while the flat market had a stable index of 50.7, reflecting the larger number of producers in the long products market.

The production change index was reported at 44.7, with producer respondents having an exceptionally low index of 41.6, indicating their intention to reduce production for the upcoming summer months.

The inventory change index was reported at 47.2, with service centers having a positive index of 52.8 and distributors having the lowest index of 44.6.

Inventories of long products were reported to be lower than the previous month, with 83.3% of respondents indicating that they had 45 days or less of stock.

For flat products, the range of reported inventory days was wider, with a tendency towards higher inventories. Of the respondents, 22.7% reported having more than 75 days of stock, 13.6% reported 61-75 days, 22.7% reported 46-60 days, and the remaining respondents reported less than 45 days.

Producers and service-center respondents both expect an increase in the price of raw materials, with an index of 53.3 and 52.8 respectively.

"In the month of May, there was a slight increase in scrap prices in Mexico, ranging between Peso 600-700," a respondent said. "It is expected that there may be a marginal increase in June."

Prices for busheling scrap were reported in the range of Peso 5,500-7,250/mt ex-works while HMS was reported in a range of Peso 5,150-5,800/mt EXW.