Mexican supplier upends Southwest market

Aug 09, 2013 | 04:52 PM | Samuel Frizell

Tags  Merchant bar, Deacero SA, Gerdau SA, Aceros Corsa, Aceros Corsa Ticoman, Luciana Cordova, market competition, distributors Samuel Frizell

NEW YORK — A Mexican merchant bar supplier near the California border is changing the regional market by selling steel to end-users and fabricators, detouring around many of the Southwest’s traditional distributors.

The supplier, Aceros Corsa Ticoman, is the distribution arm for Mexican mill Aceros Corsa SA, which once supplied U.S. service centers in the region and now competes with former customers. The lower-priced imports, sold to service centers’ traditional customers in partial truckloads, have compressed margins for steel merchant bar distributors in Arizona, California and Nevada, sources said, and eroded the older distributors’ long-standing customer base.

"You have a Mexican distributor selling to the same people we’ve been selling to for years and their customers and then their customers, and it’s all gone," said a source at a steel service center in California. "I’ve seen our market share shrink big time."

Mexican merchant bar prices have been very low in recent months, sources said, with a large increase in supply coming on to the market with the startup of Mexican long steel products producer Deacero SA de CV’s new mill in March, softening prices and causing distributors like Ticoman to expand their customer base.....

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