• Skip to main content

    Mexico

    September 6, 2024

    HR futures: Trade case action official - It was already priced in?!

    Written by Spencer Johnson

    This month’s column on the markets could be a response to the question of last month, “Are the forward curve prices on Aug. 7 high enough to price in trade case risks?” The market’s answer has been a pretty resounding YES so far, I think. If you look at the curve month over month, the weaker spot price has been a much bigger factor in the pricing than the recent trade case. The risk of that case has been long thought of as a key driver of forward risk and thus contango in the futures curve.

    That being said, the news brought us back up to some higher trading ranges, but that is only because buyers in the futures market for Comex HRC on Sept. 5 seemed to have hit the panic button on the initial news of the trade action that was announced on Thursday. Early day it got wild but the buying frenzies faded into the afternoon and we were mostly sideways on average to start the day Friday (at time of writing). The exception is October, which was back up to $728 per short ton (st) vs. $718/st settlement on Thursday. Here is how it looks month on month vs. our previous report a month ago, and this is even accounting for the rally on Thursday;

    Spencer Johnson

    A broker at FCStone LLC, Johnson is a veteran in the world of steel futures. He has worked with every type of market participant to formulate risk management and trading strategies for steel derivatives. StoneX has also worked tirelessly to grow liquidity and provide access to new ferrous markets for its clients. Johnson is in addition one of the longest serving members of the London Metal Exchange’s steel committee.

    Read more from Spencer Johnson

    Latest in Mexico

    Commerce amends duties on pipe and tube imports

    The US Department of Commerce recently made adjustments to the anti-dumping duties (AD) on certain steel pipe and tube imports after annual administrative reviews, according to notices in the Federal Register. Commerce reviewed the AD order on imports of oil country tubular goods (OCTG) from Mexico and lowered the dumping rate for one company. Tubos de Acero de Mexico received a 1.87% dumping rate for the year ended Oct. 31, 2024. The rate is down notably from 26.1% in the previous year. The all-others cash deposit rate remains set at 44.93%.

    Deacero casts first billet at new Ramos Arizpe mini-mill

    Mexican longs producer Deacero has cast the first billet at its new minimill in Ramos Arizpe, Mexico, moving the Danieli-supplied caster into commissioning. It's a key milestone for Deacero's $600-million Ramos II mini-mill, said Italian plant engineering and equipment provider. "The achievement further strengthens the long-standing collaboration between Deacero and Danieli, and further confirms Danieli’s already-established presence in the Mexican long-products market," the company said in a statement on Nov. 2.

    Commerce lowers Mexico’s dumping rate in CORE case

    The US Department of Commerce has reduced the anti-dumping duty on corrosion-resistant steel (CORE) for some Mexican producers after a court order. On remand from the Court of International Trade (CIT), Commerce agreed that the record did not show that Galvasid SA de CV’s US customers separately negotiated or paid freight or insurance. The agency therefore removed the adjustment and recalculated the margin. As a result, the agency lowered Galvasid’s coated steel dumping rate to 14.54%, from 24.05%. The all-others rate is now 14.29%, down from 17.42%. Ternium’s rate is unchanged at 14.17%.

    Court turns to creditor consortium after AHMSA auction bid falls through

    The leading bidder for bankrupt Mexican steelmaker Altos Hornos de Mexico (AHMSA) failed to provide the required earnest money guarantee to confirm its $1.4 billion bid for the steelmaker and its Minera del Norte (MINOSA) mining assets. The court will now consider selling the assets to a consortium of creditors. After the bankruptcy auction on Sept. 25, the court overseeing the proceedings granted the leading bidder, Construcciones e Ingenierías Electromecánicas SA de CV (CIESA), ten days to provide a bid bond of $56.3 million. The Oct. 13 deadline passed without any prequalified bidders, including CIESA, providing the required amount. In fact, the court said CIESA deposited only 5,000 Mexican pesos (US$271).