For past two weeks, the price of Mexican domestic cold rolled coil (CRC) has remained in the level of US$777/mt ex-mill, representing a decrease of US$7/mt compared to prices reported the first week of May.
Sources tell SteelOrbis that prices for CRC could continue to decline slowly, as automakers consolidate their investments and begin to operate, and competition among manufacturers of special steels for the automotive sector continues to grow. Automakers represent a significant portion of demand for steel, but that means local mills must match not only the quality of steel, but the price of imports. If the costs of logistics and inventory are competitive for the automotive sector, the steel content will remain primarily Mexican, said auto industry sources.
However, production capacity in Mexico of this type of steel is significantly short, such that Altos Hornos de Mexico (AHMSA) invested US$2.3 billion in an expansion designed partly to supply automakers. Ternium also invested US$330 million toward processes to finish rust-resistant steel, and Posco is spending US$300 million to more than double its capacity for similar products.