Mexico’s domestic ferrous scrap prices fell in the Central area, which was severely affected by a shortage of natural gas.
Prices began to fall in the Central area after some mills reduced or halted operations after the government asked them to cut down on consumption of natural gas due to a shortage in the country, according to market participants.
Scrap prices are expected to continue falling next week in the Central area as supply is significantly outpacing demand as mills cut back on their purchases. The unavailability of natural gas, which is mostly imported from Texas, was felt acutely by bigger steelmakers like Altos Hornos de México (Ahmsa), which has reportedly lost 20,000mt of steel production this week due to the shortage.
In Central Mexico, the weekly Davis Indexes for all grades fell by MXN250/mt with #1 HMS decreasing to MXN7,650/mt delivered Mexico consumer, P&S 5ft falling to MXN7,800/mt delivered, shredded moving down to MXN7,600/mt delivered, machine shop turnings declining to MXN7,250/mt delivered, and #1 busheling dropping to MXN7,850/mt delivered.
In Bajío, the weekly Davis Index for #1 busheling rose by MXN250/mt to MXN9,050/mt delivered Mexico consumer. The weekly indexes for all other grades held unchanged with #1 HMS flat at MXN8,175/mt delivered Mexico consumer, P&S 5ft settling at MXN8,463/mt delivered, shredded remaining unchanged at MXN9,200/mt delivered, and machine shop turnings at MXN7,600/mt delivered.
In North Mexico, the weekly Davis Index for machine shop turnings fell by MXN200/mt to MXN8,050/mt delivered Mexico consumer. The weekly indexes for all other grades were flat with #1 HMS at MXN8,333/mt delivered, P&S 5ft at MXN9,133/mt delivered, shredded at MXN9,083/mt delivered, and #1 busheling at MXN9,333/mt delivered.