Mexican domestic electro-galvanized sheet prices dropped US$20/mt ex-mill since last week, falling into the level of US$904/mt ex-mill. This is the steepest decline in two months, coming after a steady price level of US$924-$928/mt/ex-mill.
Sources tell SteelOrbis that automotive sector investments may be pushing prices down from increased competition. Clusters of automotive-related companies are clustering around major assemblers, but many are foreign companies.
Mexican flat steel producers understand the competition and are ready to meet the demand of the automakers. But it is not easy, sources say, when there are so many chains of foreign suppliers. For example, the Japanese company Hirotec Tooling Autoparts Mexico just opened a US$40 million plant in the Bajio region of Guanajuato recently, one of 29 foreign plants that have come to this city in the last seven months with a combined investment of US$891 million, according to sources of the state of Guanajuato.