Prices for Mexico’s domestic scrap market remained stable in the Northern and Central regions with only a decrease in the Bajio area as some mills have started to implement decreases on all grades in the MXN400/mt range. The national market is entering a period of uncertainty as it becomes apparent that mills are trying to push down the market and sellers are not ready to acknowledge the downtrend. Some mills have issued announcements for price decreases, in that same price range, for as soon as tomorrow in Bajio. Some announcements mention the decrease will take place next week.
Mills argue that demand for finished steel has been stagnant due to a lack of significant infrastructure projects in Mexico and the onset of the rain season in several states, including Central Mexico, which curtails construction activity. Some contacts informed that the rains stall construction projects as the onsite cement pouring has to be stopped. They do acknowledge that the downturn, if takes a hold on the market, could be temporary and come to a stop as soon as the rains are over. Nevertheless, the rainy season in Central Mexico can extend beyond the summer months.
In the meantime, in the Northern region of Mexico, prices remained unchanged at MXN7,900/mt ($459/mt) delivered consumer for #1 busheling, MXN6,000/mt ($349/mt) delivered for HMS I, MXN7,000/mt ($407/mt) delivered for P&S 5ft, MXN7,900/mt ($459/mt) delivered for shredded, and MXN5,100/mt ($296/mt) delivered for machine shop turnings (MST).
There is open displeasure on the part of sellers regarding the recent announcements, believing that mills are trying to manipulate the market into a downturn when in fact there is a healthy demand for scrap. Additionally, TYASA’s new SBQ plant in Veracruz should add to the demand as the facility will be reportedly consuming prime grades mainly, as they ramp up activity towards a nameplate annual capacity of 400,000mt, as reported by SteelOrbis. Some contacts did mention, nevertheless, that the new plant could supplement scrap volumes with imports.
Prices were also stable in the Central region, with MXN7,300/mt ($424/mt) delivered consumer for #1 busheling, MXN6,600/mt ($384/mt) delivered for HMS I, MXN7,200/mt ($418/mt) delivered for P&S 5ft, MXN7,800/mt ($453/mt) delivered for shredded, and MXN5,500/mt ($320/mt) delivered for machine shop turnings (MST).
Contacts, both sellers and buyers, acknowledged that some of the mills in Bajio that began decreasing their prices today have robust scrap inventories. Hence, prices in this region were the first to see actual decreases on Friday. Next week, it will be seen if the mills were able to implement further price contractions or if they relented as they continue to compete for tonnages.
In Bajio, the price of #1 busheling decreased by MXN200/mt ($11.6/mt) to MXN7,800/mt ($453/mt) delivered consumer. HMS I fell in price also by MXN200/mt ($11.6/mt) to MXN6,800 ($395/mt) delivered, P&S 5ft saw the largest drop at MXN800/mt ($46.5/mt) and settled at MXN6,600/mt ($384/mt) delivered. Shredded contracted by MXN300/mt ($17.4/mt) to MXN7,700/mt ($447/mt) and MST fell by MXN300/mt ($17.4/mt) to MXN5,800/mt ($337/mt)
$1 = MXN17.2
