The value of wholesale sales by large scrap metal companies in the Mexican domestic market decreased 28.6 percent, year-over-year, in real terms in April. Given a change in the weights (base year), the negative trend intensified, according to a SteelOrbis analysis of data from national statistics agency Inegi.
As of June, Inegi changed the base year of some economic indicators from 2013 to 2018. With the updated indicator, wholesale sales of scrap accumulated 11 consecutive annual declines.
The descent is now steeper; with the 2013 base, in January the annual drop was 0.7 percent, the new base, in that same month, the drop was 19.5 percent. The variation is measured by the value of sales.
The sale of scrap metal is of vital importance in Mexico. According to the steel company Gerdau Corsa, 93 percent of the steel produced in Mexico is made from scrap.
Considering only the month of April, the drop of 28.6 percent in 2023 is the most severe in the last 14 years, only surpassed by the drop of 29.2 percent in 2009.
In the January-April period, the sale of scrap in the Mexican steel market decreased 28.2 percent. It is also the worst drop in the last 14 years.
The information from Inegi corresponds to the trade with wholesale sales of waste materials, which includes the sale of metal scrap, glass, plastic, paper and cardboard, among other reusable waste. The 28.6 percent drop in sales corresponds to total activities. Metal scrap concentrated 68.4 percent of the total sales of said industry.
Currently, the kilogram of metal scrap in retail recycling centers in some parts of Mexico City is paid at MXN 4.5 per kilogram, which is equivalent to $255/mt. These retail centers sell the product to the wholesale centers that are measured by Inegi.