On May 3, SteelOrbis reported the likely downward trend of the Mexican domestic scrap market later in the month.
Prices in early May were estimated at approximately MXN 6,300-6,650/mt ($329-347/mt) for busheling scrap, MXN 6,250-6,550/mt ($327-333/mt) for shredded scrap, MXN 6,200-6,500/mt ($324-340/mt) for P&S, and MXN 5,950-6,150/mt ($311-322/mt) for HMS I, all prices on a delivered to customer basis. While prices firmed up slightly through April, the devaluation of the peso against the dollar since March decreased the scrap prices in dollar terms.
Sources report that through May, Mexican mills have lowered scrap buying prices by MXN 200-300/mt ($10-15/mt) across all grades.
While moving in tandem with the US, prices of Mexican finished steel products have increased since March. Scrap prices, however, have followed the US’ downward trend in the early May buy-cycle. The trend is presently being reinforced by softness in the global scrap market as scrap buyers in Turkey are booking limited scrap from North America in favor of EU and Baltic-region sources. Additionally, Turkish buyers are facing the depreciation of the lira against the dollar, US import tariffs, and overall challenges in product sales, therefore their cargo prices on imported scrap have declined.
Both the decline in buys by Turkish mills from US inventories and the lower Turkish scrap imported prices are placing downward pressure on US export prices. Mexican mills are expected to take the opportunity to increase US imports, although the MXN devaluation against the dollar should help buoy domestic prices.
USD = MXN 19.12 (May 3)
USD = MXN 19.69 (May 24)