Mexico generally tends to follow the pricing of its northern neighbor, namely, the US. As noted by a source close to SteelOrbis, "Mexico tends to follow the US with a slight lag both when going up or down." Over the summer, domestic US scrap prices began to decline after a short high in May, yet, Mexican scrap prices continued on a premium pricing schedule until early September. In the course of the month, Mexican scrap prices were hit by a $50/mt decline across all grades. With finished goods' prices in Mexico plummeting and a surplus supply of import scrap at desirable prices, mill buyers pressed rapidly to adjust domestic scrap prices.
HMS I scrap is at MXN 3,500-3,900/mt ($184-205/mt), shredded scrap is at MXN 3,900-4,100/mt ($205-216/mt), and busheling continues to move in tandem with P&S and is presently at MXN 4,100-4,500/mt ($216-237/mt), all prices delivered to mill. In areas more dense with automotive producers in Northern Mexico, busheling is said to be on the higher range in closed negotiations.
Domestic scrap prices in Mexico have moved slightly down this week to adjust for currency fluctuations against the dollar and to reflect the lower October scrap prices in the US. For the last four weeks, the currency had dipped 2 to 4 percent from levels sustained since May 2016, but is showing signs of recovery this week.
In regards scrap flow in Northern Mexico, scrap yards have adjusted prices to collector's 20-30 percent down from prices in September to tighten supply. Scrap traders are preparing for an additional price adjustment down but believe the majority of the adjustment by mills is behind them.
$1= MXN 18.98