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

Scrap supply will remain tight in Mexico over the next 3-4 months due to the economic impact of COVID-19’s spread in the country.


The collection of scrap has decraesed across the country due to the suspensions in manufacturing operations by the automotive industry at the end of March to contain the spread of the virus, Mexican steelmakers and recyclers said during a webinar titled “Steel Industry during COVID-19”, developed by the National Confederation of Steel Distributors (Conadiac).


The market doesn’t have enough scrap to feed current demand, which, in turn, is affecting costs and prices for metals scrap, according to Luca Da Rocha, Sales Manager at Gerdau Corsa. He added that the market will be on stand by over the next few weeks due to lack of material.


Scrap prices are expected to increase over the next few months due to limited supply, Humberto Abaroa, director at Grupo Acerero, said without disclosing the increase in prices. The mill is mulling reduction in its output as there is no demand domestic or export demand for steel products, Abaroa said, adding that in May and June, prices of steel products will remain stable.


At the beginning of April, the federal government ordered Mexican steelmakers to produce steel only for government projects, amid the COVID-19 crisis.


Mexico’s crude steel production could fall by 10-15pc this year to 16mn mt, compared to 2019 due to the effects of COVID-19 pandemic.

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