Mexico’s scrap prices have increased between 8-10pc over the last three weeks due to a higher demand for steel products, Javier Pérez Domínguez, chief executive officer at Recicla Centro, an industrial recycling center, told Davis Index.
The high demand is likely to continue into 2020 driven by new construction and infrastructure projects taking off after the government unveiled a plan to construct 147 infrastructure projects, according to Domínguez. The plan includes construction of highways, railways, ports, airports, telecommunications, energy, water and sanitation, with all these projects requiring thousands of tonnes of steel and concrete.
However, steel prices through much of 2019 recorded declines, falling 30-35pc compared with 2018 due to the trade war between the US and China, he added. These factors and less spending to develop major projects in Mexico, such as the construction of Mexico City’s New International Airport affected the scrap and steel industry.
The rod and structural steel products were the most impacted as the growth of the construction industry decrease of 7.4pc between January and October this year. The country’s steel production decreased by 3.6pc in October to 1.5mn mt. In November, Mexico’s government announced an infrastructure plan worth 859bn peso ($42.9bn) for infrastructure projects to be developed between 2019-2024.