Mexico’s domestic ferrous scrap prices climbed by $8.7-32.5/mt depending on the region on Friday amid high demand and tight supply.
Scrap prices in the northern region increased in the range of $25-32.5 as mills continued to struggle with material collections despite their willingness to pay higher rates to secure volumes for December 2020 and January 2021, a market participant said, adding that scrap prices may rise by $30/mt in January as demand outpaces the supply of scrap.
Another factor that could raise scrap prices in the North over the next few weeks would be the lack of material after one of Deacero’s scrap yards caught fire on Dec 16 in Guadalupe, Nuevo León.
The company did not reveal the volumes of scrap that might have been destroyed by the fire. However, according to market participants, the yard has the capacity to hold around 20,000mt of scrap. The fire, a buyer observed, could cause the largest steelmaker in the region to redistribute the scrap it expects into that scrapyard, among other recyclers, which could cause prices to move up further.
In North Mexico, the weekly Davis Indexes increased by MXN500/mt for machine shop turnings and shredded, to MXN7,050/mt delivered Mexico consumer, and MXN8,100/mt delivered, respectively, on Friday. The index increased by MXN650/mt to MXN7,400/mt delivered Mexico consumer for HMS 1&2 (80:20), by MXN900/mt to MXN7,800/mt delivered Mexico consumer for P&S 5ft, and by MXN100/mt to MXN8,000/mt delivered for shredded.
Scrap prices in the country’s Central and Bajío regions rose to a lesser extent by $8.7- 17.5/mt across all grades as mills continued their quest to collect material to meet strengthening demand from the automotive and white goods sectors.
The weekly Davis Indexes in Bajío for HMS 1&2 (80:20) rose by MXN350/mt to MXN7,950/mt delivered Mexico consumer, P&S 5ft increased by MXN375/mt to MXN8,175/mt delivered, shredded climbed by MXN163/mt to MXN8,188/mt delivered, #1 busheling moved up by MXN300/mt to MXN8,225mt delivered, and machine shop turnings climbed by MXN600/mt to MXN6,550/mt delivered.
In Central Mexico, the weekly Davis Indexes for all grades increased by MXN175/mt. The index for both #1 busheling and HMS 1&2 (80:20) was at MXN7,825/mt delivered Mexico consumers, respectively. Shredded reached MXN8,175/mt delivered, P&S 5ft was at MXN7,925/mt delivered, and machine shop turnings rose to MXN6,425/mt delivered Mexico consumer.