Prices in the Mexican domestic ferrous scrap market fell for a third consecutive week as demand has declined due to healthy inventories. Some mills in the Centro region have reported robust stock levels of scrap and will not receive more material till Jul 1. Underlying the healthy scrap flows, some contacts report, is low scrap consumption levels on account of a weak Mexican rebar market. Heavy rains remain an almost daily occurrence in the Central and Bajio regions, curtailing construction activity.
Although the softness in the rebar market is relative. Rebar prices fell by MXN500/mt ($28.6/mt) in the past month, but they are still above any price level seen since November. The current price sits at MXN16,000/mt ($915/mt) ex-Mexico mill. It had been growing constantly since MXN12,800-13,800/mt ($732-789/mt) ex-mill in February. And it sits slightly above MXN14,500-15,500/mt ($829-887/mt) ex-mill in November 2025. Still, the latest bearish trend in the past month has disrupted mills' scrap projections, and they are having to deal with larger scrap inventories.
Moreover, this week was the first one where prices fell in the Northern region, which had remained stable compared to the Central and Bajio region’s prices. Some mills in the Northern region were seen decreasing their prices for prime grades by MXN500/mt ($28.6/mt) and secondary grades by MXN300/mt ($17/mt). The price of #1 busheling fell by MXN600/mt ($34/mt) to MXN6,670/mt ($382/mt) delivered consumer, HMS I fell by MXN200/mt ($11/mt) to MXN5,800/mt ($332/mt) delivered, P&S 5ft fell by MXN100/mt ($5.7/mt) to MXN6,900/mt ($395/mt) delivered, shredded fell by MXN200/mt ($11/mt) to MXN7,700/mt ($440/mt) delivered, and machine shop turnings (MST) contracted by MXN100/mt ($5.7/mt) to MXN5,000/mt ($286/mt) delivered.
Mexico’s scrap prices could recover after the rainy season and if construction activity renews its usual activity levels. Additionally, contacts are aware that Mexico’s prices cannot drop significantly more than US prices; otherwise, mills start having trouble securing tonnages against the export market. #1 busheling in Houston sits at $410/gt (MXN7,059/mt) delivered consumer, already close to MXN500/mt ($29/mt) above its counterpart in Northern Mexico. US prices are expected to remain sideways in July, and prime grades could even increase slightly. And overall, the US scrap market is expected to remain stable for the rest of 2026 given healthy steel production and demand. So Mexican mills will have to keep this situation in mind in the coming weeks.
#1 busheling prices in Central Mexico fell by MXN300/mt ($17/mt) to MXN6,900/mt ($394/mt) delivered consumer while HMS I fell by MXN300/mt ($17/mt) to MXN6,000/mt ($343/mt) delivered. Prices for P&S 5ft decreased by MXN300/mt ($17/mt) to MXN6,800/mt ($388/mt) delivered, shredded prices contracted by MXN100/mt ($5.7/mt) to MXN7,500/mt ($428/mt) delivered, and MST fell by MXN300/mt ($17/mt) to MXN5,000/mt ($286/mt) delivered.
In Bajio, the price of #1 busheling fell by MXN500/mt ($28.5/mt) to MXN7,100/mt ($406/mt) delivered consumer. HMS I prices slipped by MXN300/mt ($17/mt) to MXN6,300/mt ($360/mt) delivered while P&S 5ft remained unchanged at MXN6,600/mt ($377/mt). Shredded prices fell by MXN100/mt ($5.7/mt) to MXN7,600/mt ($434/mt) delivered, and MST contracted by MXN100/mt ($5.7/mt) as well to MXN5,500/mt ($314/mt) delivered.
This week, the government of the Mexican state of Zacatecas announced the development of an automobile cluster that could develop auto parts and supply national auto supply chains with products that are usually imported. Amid USMCA negotiations, Mexico is trying to be more independent when it comes to key commodities for its supply chains.
$1 = MXN17.5
