The Mexican statistics agency Inegi will analyze integrating scrap metal prices into the Producer Price Index (PPI) that will be updated for next year, Inegi responded to a direct question from SteelOrbis in a press conference.
The PPI measures inflation in producer prices. Its most recent update is from 2019, so from 2025 there will be a new structure to measure. The first phase is a public consultation that will conclude on December 6.
The change to the PPI is due to international recommendations to keep the weights that measure prices updated. An example, cited by Inegi, was the lower use of cameras due to the greater use of smartphones that can have more than one integrated camera.
In this regard, SteelOrbis asked if the PPI could include scrap metal. The deputy general director of Price Indices of Inegi, José Alberto Reyes, responded that the simple purchase-sale cannot be considered in the PPI, but if the scrap goes through a value-added or transformation process and is then sold to the steel industry, it will be considered to be included in the new catalog of products that will integrate the industrial price indicator.
Currently, companies such as Ternium, DeAcero, Frisa, Grupo Acerero and Tyasa are in the process of expanding their production capacity in Mexico. The main input for steel production is metal scrap. In addition, the Brazilian company Gerdau is analyzing the construction of a new steel mill in Mexico of 650,000 metric tons per year, which will also be fed with scrap.
According to some specialists, the metal scrap market in Mexico is 12.5 million tons per year. This would be equivalent to about $3.7 billion.