Scrap price ranges in Northern Mexico widened this week as mills continued to adjust scrap prices to global indexes, the US market, and reduced prices on finished goods while balancing tighter flows into scrap yards and strong industrial demand. HMS I scrap is at 3,600-4,000 pesos/mt ($187-208/mt), shredded scrap is at 3,900-4,300 pesos/mt ($203-223/mt), busheling and P&S scrap at 4,200-4,700 pesos/mt ($218-244/mt), all pricing referenced delivered to mill. Monterrey region is slightly lower than other regions in El Bajío.
In September, scrap prices in Mexico absorbed approximately a $50/mt decline across all grades as Mexican mills and distributors adjusted the pricing of finished goods in tandem with decreases in US prices of HRC and CRC. The rapid decline in finished goods prices put immediate pressure on scrap prices.
While further downward pressure is expected from mills through October, scrap dealers close to SteelOrbis believe prices will remain relatively stable for the month due to tight supply flows and strong automotive industry demand for the premium grades. A scrap dealer stated, "Busheling and P&S, which are preferred by the automotive industry, will continue strong and higher than the US." In September, automobile exports from Mexico to the US were up 16.8 percent compared to a year ago while domestic sales of automobiles in Mexico grew by over 18 percent. Additionally, companies such as Ford and Audi are in line to add additional production in the near future.
$1 = MXN 19.26