Mexican steel market sentiment remains subdued as weak demand persists

Mexican steel market sentiment has stayed muted, with the steel price development index slipping to 43.86 as lackluster demand and slow-moving projects continue to weigh on the industry, according to a survey from Platts, part of S&P Global Energy, released Sept. 10.

The 40 respondents to the survey included service centers, distributors, profile sellers, producers, scrap dealers, consumers and traders.

Demand continued to be the market's main challenge, with respondents highlighting the absence of new projects and competitive conditions.

Distributors reported the lowest optimism with a steel price index of 42.86, while producers maintained a relatively brighter outlook at 55.56.

"There is simply no demand," a service center respondent said.

A consumer respondent added, "Demand is not improving, there are few projects and very competitive conditions."

The production change index weakened further to 42.98 from 44.2 in August, with distributors showing the most pessimistic outlook at 41.27.

Service centers bucked the trend with a more optimistic index of 55.56, suggesting some segments may be preparing for potential market shifts.

Inventory management remained conservative, with the overall inventory index at 47.81. Distributors reported an index of 44.44, while producers and service centers were more stable at 50.

Long steel inventories were concentrated in shorter time frames, with nearly 60% of respondents holding less than 30 days of stock, while flat steel inventories varied widely.

Raw material price expectations showed mixed signals with an index of 45.61, up from August's 43.75.

Producer respondents remained the most optimistic segment at 61.11, while service centers showed the lowest expectations at 38.89.

Market participants said supply-side disruptions continued to affect the raw materials sentiment.

"Moderate increases in scrap are expected due to the absence of ArcelorMittal in the rebar market," a scrap dealer respondent said.

Busheling scrap prices in the survey were reported at Peso 5,500-7,560/mt across various delivery terms, while heavy melting scrap was at Peso 4,200-6,350/mt, delivered and ex-works.