AMM.com Copying and distributing are prohibited without permission of the publisher
Email a friend
  • To include more than one recipient, please separate each email address with a semi-colon ';', to a maximum of 5


Deacero growing in US merchant market

Keywords: Tags  Deacero, merchant bar, Mexico, angles, channels, flats, Thorsten Schier


NEW YORK — Mexican long steel products producer Deacero SA de CV is looking to grow its presence in the U.S. merchant bar market.

"The new mill in northern Mexico makes merchant bar products and they are targeted to the NAFTA (North American Free Trade Agreement) area," a spokesman for the company told AMM in an e-mail.

Multiple buyer and competitor sources said the steelmaker already appeared to be boosting its efforts outside of its traditional sales region.

"The Mexican market itself is not very active and they need to establish themselves (in the United States)," one trader said.

An East Coast distributor said he had been offered material from the Monterrey-based steelmaker recently.

The trader confirmed that Deacero material was being offered into the East Coast and even Canada, but noted that the company was particularly competitive in the Southwest due to low freight costs. "I’ve heard numbers (for 2 x 2 x ¼-inch angles) as low as $660 per ton ($33 per hundredweight)," he said, although other sources reported offers at or slightly below $700 per ton ($35 per cwt) from the Mexican steelmaker.

Domestic prices for 2 x 2 x ¼-inch angles are around $753 per ton ($37.65 per cwt), 3 x 3 x ¼-inch angles are $762 per ton ($38.10 per cwt), 8- x 11.5-inch channels are $747 per ton ($37.35 per cwt) and ½- x 4-inch flats are $757 per ton ($37.85 per cwt) after mills again held prices steady this month (amm.com, July 9).

Mexican producers in general are said to be dominating the import merchant bar market, with Turkish material less attractive at the moment at around $720 per ton ($36 per cwt), sources said.

"Hearing those (Mexican) numbers, offerings from Turkish producers have no traction today," the trader said.

Sources said that in some cases domestic mills were attempting to match the import prices, but it was not typical. In the United States, most spot purchases were still said to be going at list price, with few distributors willing to take larger positions and push for discounts.

Sources wondered whether the recent rise in U.S. ferrous scrap prices (amm.com, July 3) would lead domestic mills to push for a finished steel product increase soon, although most were expecting flat prices in the near future due to typically slower market activity over the summer months.

"As long as demand stays low, you’re not going to see much changing," the East Coast distributor said.

If domestic producers raise prices and scrap tags continue to go up, traders said spreads might once again become more favorable for material from overseas producers, although demand has a role to play as well.

"Demand’s got to kick up. Just because pricing looks good, demand still has to be there," a second trader said.

The first trader added that few companies are willing to take positions at the moment to justify large shipments. "They’re pretty strict with inventory control. They used to buy 1,000 tons; now they’re coming with 100, 150 tons," he said.


Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.



Latest Pricing Trends