Mexico’s domestic ferrous scrap prices increased on Friday amid continued high demand for the material from the automotive and construction industries.
Scrap prices across all grades in the North, Central, and Bajío regions are expected to rise by $50/mt in December as demand outpaces the supply of scrap, market participants from the three regions indicated.
Mexican mills across the three regions are struggling to collect scrap and have had to pay premiums to import the material to fulfill the demand for it in Mexico. According to a market participant that has operations in the Central and Bajío regions, Turkey, which is a key destination for ferrous scrap exporters, has monopolized the market purchasing 22 vessels per month causing a supply squeeze for Mexican importers.
Scrap prices in North Mexico rose $7.5/mt, and are expected to climb further as a mill in this region will continue applying increases of around MXN250/mt ($12.6/mt) week-on-week to secure supply for December 2020 and January 2021, due to low availability and high demand.
In North Mexico, the weekly Davis Indexes increased by MXN150/mt for machine shop turnings, P&S 5ft, shredded, and #1 busheling to MXN6,350/mt delivered Mexico consumer, MXN6,700/mt delivered, MXN7,400/mt delivered, and MXN7,700/mt delivered, respectively, on Friday. The index for HMS 1&2 (80:20) rose by MXN33/mt to MXN6,500/mt delivered Mexico consumer.
Scrap prices in the Bajío and Central regions rose between $7.6- 12.6/mt, respectively, during the week.
The weekly Davis Indexes in Bajío for HMS 1&2 (80:20) rose by MXN150/mt to MXN7,350/mt delivered Mexico consumer, P&S 5ft increased by MXN250/mt to MXN7,575/mt delivered, shredded climbed by MXN125/mt to MXN7,850/mt delivered, #1 busheling moved up by MXN250/mt to MXN7,825mt delivered, and machine shop turnings increased by MXN150/mt to MXN5,750/mt delivered.
In Central Mexico, the weekly Davis Indexes increased by MXN250/mt for #1 busheling, machine shop turnings, and shredded to MXN7,350/mt delivered Mexico consumer, MXN5,650/mt delivered, and MXN7,700/mt delivered, respectively. The index for P&S 5ft increased by MXN150/mt to MXN7,250/mt delivered and climbed for HMS 1&2 (80:20) by MXN600/mt to MXN7,350/mt delivered Mexico consumer.