Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Mexico’s domestic ferrous scrap price indexes trended mostly sideways to up on Friday amid continued strong domestic demand and long lead times at mills that are requiring strong capacity utilization levels. 


Market participants note continued tight scrap inventories, exported scrap loads, and several mills in the Northern region reaching into Bajio. Most of the scrap increases are expected in the first week of June once the US domestic scrap trades and the export markets gain some clarity. 


Northern and Bajio market participants noted an expectation of the US scrap market in Texas trading up $30-40/gt against May settled prices though, some other US regions could trade higher. 


The US-origin HMS 1&2 (80:20) index fell by $10.88/mt to $502.31/mt cfr Turkey on Friday against May 21 but was still over $50/mt against May 3.  Following the US and global dynamics, Mexico’s rebar and HRC prices are at record highs and are also facing long lead times. The country also has some tariffs and AD/CVD tariffs on importers which are limiting unfair trading price levels into the domestic market. 


In North Mexico, most prices trended sideways, but some indexes changed as buys varied. One buyer noted a large price variation when buying for smaller scrap sellers versus larger dealers. Large mill buyers noted a focus on buying from smaller scrap yards as dealers and industrial producers with large guaranteed volumes were at a premium price and some were selecting to export the scrap or sell into other regions. 


The weekly Davis Index in North Mexico for #1 HMS fell by MXN64 to MXN8,881/mt ($445/mt) delivered and P&S 5ft fell by MXN115/mt to MXN10,125/mt delivered. Shredded remained unchanged at MXN10,163/mt delivered. Machine shop turnings moved down slightly by MXN67/mt to MXN8,275/mt delivered while #1 busheling encountered a sharper fall of MXN449/mt to MXN10,525/mt delivered given higher sales included in the previous week.


The weekly Davis Indexes in Bajío for #1 HMS and shredded were unchanged at MXN8,763/mt delivered mill and MXN10,188/mt. P&S 5ft increased by MXN200/mt to MXN9,900/mt delivered as machine shop turnings climbed by MXN100/mt to MXN8,138/mt delivered. #1 busheling gained MXN75/mt to MXN11,013/mt delivered.


In Central Mexico, the weekly Davis Indexes were unchanged for #1HMS, machine turnings, shredded, and #1 busheling at MXN10,050/mt, MXN9,350/mt, and #1busheling at MXN11,013/mt delivered to mill. P&S5ft rose by MXN25/mt to MXN10,525/mt.



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