The reason for the rise in steel prices is in the global demand for government infrastructure plans that support their economies to get out of the recession They may have forgotten one. A car that perhaps the grandfather left before he died, nobody paid the holdings or could repair it and there it is, ruined.
Those metal remains, even in the worst condition, today could deliver about 8 thousand pesos in exchange for taking it to a scrap buyer.
Enough for a nice dinner with friends
The world is crazy about steel these days and new or used for recycling, they’re paying for it at prices most can’t remember.
That’s good for someone who wants to sell a company like Altos Hornos de México (AHMSA), let’s say. But it is bad for those who want to set up a business selling gas in tanks or for those who want to build a house or a refinery, for example. The Bloomberg Steel Skrotpriser Index is unprecedented at current price levels for this metal. At least since 2012
Only so far this year it increased 21.72 percent. In the United States, consumers report that the prices of certain products have tripled compared to what they found before the pandemic.
In Mexico, products that are highly dependent on this raw material and on scarce parts, such as chips, also raise their prices rapidly. Cars, precisely, raised their price more than 9 percent, according to Inegi, during the last 12 months.
The reason for the rising prices of steel is, as with copper and other commodities,
In the world demand generated by government plans of other countries that support their economies to quickly emerge from the economic recession caused by the pandemic.
This trend could accelerate once the US plan for more than one trillion dollars to remodel the infrastructure of that country is defined. This week the project advanced significantly and the businessmen of that country are pressing for their Congress to finish specifying it.
Investment in infrastructure is essential for economic recovery.
Investing in the infrastructure of the United States will create millions of jobs, improve global competitiveness and add trillions of dollars in economic growth, ”the Chamber of Commerce of the neighboring country to the north warned yesterday on the main page of its website.
This situation generated a party in steel companies, obviously.
Recolor Mattel is worth 177 per cent more than last year, based on its share price, returning to 2018 levels. Terbium is worth 217 per cent more than in 2020 for similar reasons.
“We expect Terbium to benefit from a positive revenue momentum as demand and prices recover in Latin America and North America,” said analyst Rodolfo Angele of US bank JPMorgan, who changed Terbium’s stock rating to ‘overweight. ‘, which implicitly suggests a purchase, thus joining the majority of those who analyze the situation of the company.
It would seem, then, that there are no clouds on the horizon for an industrial sector that has a special impact on national regions such as the states of Michoacán or Nuevo León.
There is, however, a threat that until today is little considered.
In the European Union, critics of the practices of the steel industry−which is highly dependent on the burning of coal and other fuels−work on barriers for those companies that do not properly monitor ESG (environmental, social and corporate governance) criteria. of their companies) or ESG, in English.
The European Commission presented a mechanism called the Carbon Adjustment Border Mechanism , which could soon charge access fees to that region for steel from foreign companies. With this, the legislators intend to dissuade directors of steel companies in that region from removing their steel mills from the area in the face of ambitious climate action in the old continent.
But all that remains to be seen. Meanwhile, the steel companies celebrate the arrival of an era that can hardly be repeated.
