Mexican domestic scrap prices generally stable with some mixed movements

According to sources, the scrap market in Mexico is presently “trending generally stable with slight mixed movements.” The general stability over the past month is attributed to the sideways trend in the US September scrap buy-cycle, relatively stable currency exchange rate movements compared to earlier in the year, and equilibrium in the supply-demand chain.

Compared to foreign exchange volatility early in the year, the exchange rate decline from MXN 21.91 to MXN 17.72 per dollar rate has decreased Mexican scrap domestic prices in MXN terms while increasing prices in dollar terms.

In the Northern Mexican region, HMS I is trading at $265-271/mt in Monterrey and $265-268/mt in El Bajio, both in delivered terms. The prices for P&S, shredded and busheling are trending higher in El Bajio compared to Monterrey. In Monterrey, the price of the three grades ranges at $282-293/mt delivered while in El Bajio prices on the same grades range at $296-310/mt delivered. A month ago the three grades ranged at $279-286/mt in Monterrey while in El Bajio the range was at $301-312/mt.

Unlike in the US where busheling scrap has a substantial premium over shredded scrap, busheling and shredded grades are priced closely in Monterrey or with a slight $9-11/mt spread in El Bajio. According to a source, this is due to a strong flow of busheling from automotive related firms in the Northern Mexican regions under review which allows for adequate supplies of industrial grade scrap to meet demand.

Mid Sept ($1= MXN 17.72, Sept 14):

Mid Aug ($1= MXN 17.95, Aug 9):