Mexico’s scrap prices have increased over the last week because, despite the COVID-19 pandemic wreaking havoc, collection has been low and supply scarce.

 

Consumers in Mexico’s northern, central and Bajío regions have been raising scrap prices by around MXN400/mt ($16.40/mt ) over the last week, market participants told Davis Index.

 

Besides the rising scrap prices, Mexican recyclers expect lower scrap collection in the north, central and Bajío regions of the country may produce material shortages this month, said a commercial manager at Recicla Centro, an industrial recycling firm. Additionally, US prices may fall. 

 

After the automotive industry suspended operations in Mexico to protect its employees from the rapidly spreading virus, recyclers expected scrap collection to decrease during the first 15 days of April, said a trader at Recicla Siglo XX1, located in the Bajío region.

On March 24, eight carmakers suspended operations at their Mexican plants in response to the global crisis.

 

Some automakers in the country’s north may extend their suspensions by at least a week, according to a raw material buyer who works for Tupy, which is located in the northern state of Coahuila. Tupy has an automotive plant, which focuses on engine blocks and heads, with an annual production capacity of 216,000mt.

 

The director of Demetal told Davis Index that conditions for the scrap industry look unfavourable, and added that recyclers don’t know how long response measures to COVID-19 will last, but that they could have a lasting adverse impact on the industry.

 

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