Mexican ferrous scrap prices for the domestic market trended sideways this week after falling for four consecutive weeks. Some mills dropped their prices in the MXN200/mt ($11.4/mt) range across the country, yet most stayed unchanged. Nevertheless, the consensus remains that there is an ample supply of material in all regions, and mills that did not lower their prices are still not receiving material.
Some mills, at least in the Bajio region, are expected to come back to the scrap market in August, which could reinvigorate prices or at least prevent any more downgrades.
Some buyers argue that Mexico’s prices are still too high, so much so, that imports from the US seem attractive, even with freight and other costs involved. They say this is also due to a softening of prices on both coasts of the US. US West Coast (USWC) containerized scrap prices have decreased for six consecutive weeks, in the case of HMS I/II 80:20 the price has fallen to $305/mt FAS Long Beach port from $340/mt FAS at the start of June, containerized shredded has fallen to $325-330/mt FAS from $360-365/mt FAS during the same period.
In northern Mexico, the price of #1 busheling remained at MXN7,100/mt ($405/mt) delivered consumer, HMS I at MXN5,600/mt ($320/mt) delivered, P&S 5ft at MXN6,700/mt ($383/mt) delivered, shredded at MXN7,500/mt ($429/mt) delivered, and machine shop turnings (MST) at MXN4,800/mt ($275/mt) delivered.
Some sellers believe that the Mexican market still has potential to recover very soon and grow. They say that they do not think that import prices, considering freight and logistics costs involved, are competitive. They believe that the argument is used to push down the market. They also mention that some mills in the Bajio region and in the state of Veracruz continue with a healthy scrap consumption.
Regarding the macroeconomic environment, Mexico’s Secretary of State released an official statement stating that the next rounds of discussions regarding an extension of the USMCA free trade agreement will begin early next week. In its release, Mexico states that it will aim to eliminate the US import tariffs on Mexican steel under Section 232. Yet it appears to be difficult for the US to want to put a halt to its steel sector’s good run.
Prices in Central Mexico were also sideways across the board. #1 busheling prices in Central Mexico remained at MXN6,500/mt ($372/mt) delivered consumer while HMS I at MXN5,700/mt ($326/mt) delivered. Prices for P&S 5ft at MXN6,400/mt ($366/mt) delivered, shredded prices at MXN7,300/mt ($418/mt) delivered, and MST at MXN4,800/mt ($275/mt) delivered.
In Bajio, scrap prices were also unchanged on all grades. The price of #1 busheling was flat at MXN6,700/mt ($383/mt) delivered consumer, HMS I prices at MXN6,100/mt ($349/mt) delivered, while P&S 5ft was sideways at MXN6,400/mt ($366/mt). Shredded prices were flat at MXN7,400/mt ($423/mt) delivered, and MST at MXN5,300/mt ($303/mt) delivered.
$1 = MXN17.53
