Mexico’s domestic ferrous scrap price indexes mostly increased on Friday amid strong domestic demand, as Mexico is a net exporter, and limited inventories.
Several market participants noted that they are exporting scrap, especially from the Northern region, on more attractive pricing instead of offering to regional mills. The Mexican market is increasing in tandem with the expectation of an increase of $30-50/gt in obsoletes such as #1 HMS, P&S 5ft, and shredded in the US market in June.
Still, the #1 busheling index declined in all three regions despite reportedly strong demand across all grades in North, Bajío, and Central Mexico.
The US-origin HMS 1&2 (80:20) index increased by $61.19/mt to $513.19/mt cfr Turkey on Friday against May 3, which has also improved global ferrous scrap sentiment. The rise is supporting domestic markets on export demand and has facilitated substantial price increases through May. Mexican mills bid and purchase on a weekly basis. Mexican domestic steel prices have also increased to absorb the higher raw material price increases and consumer demand.
Mexican mills have increased their offer levels to US importers on HRC and rebar which in turn also influences the domestic pricing and places pressure on mills’ capacity utilization while extending lead times.
In North Mexico, the weekly Davis Index for #1 HMS rose by MXN45 to MXN8,945/mt ($448/mt) delivered and P&S 5ft increased by MXN40/mt to MXN10,240/mt delivered. Shredded climbed by MXN46/mt to MXN10,163/mt delivered, while machine shop turnings moved up by MXN42/mt to MXN8,342/mt delivered. However, #1 busheling fell by MXN93/mt to MXN10,974/mt delivered.
The weekly Davis Indexes in Bajío for #1 HMS climbed by MXN38/mt to MXN8,763/mt delivered mill while P&S 5ft increased by MXN12/mt to MXN9,700/mt delivered. Shredded rose by MXN88/mt to MXN10,188/mt delivered and machine shop turnings climbed robustly by MXN188/mt to MXN8,038/mt delivered. In Bajío too #1 busheling took back some of last week’s MXN117/mt increase, declining by MXN212 to MXN10,938/mt delivered.
In Central Mexico, the weekly Davis Indexes all rose by MXN50/mt for #1 HMS, P&S 5ft, shredded, and machine shop turnings to MXN10,050/mt delivered Mexico consumer, MXN10,500/mt, MXN10,700/mt, and MXN9,350/mt delivered, respectively, while #1 busheling dropped by MXN37/mt to MXN11,013/mt.
($1=MXN19.95)