Mexican ferrous scrap prices in the domestic market decreased in the Northern region, as several steelmakers have reportedly stopped receiving material at some of their mills for a week. In the Central and Bajio regions, prices remained sideways as depressed rebar demand continues to weigh on the scrap market. Moreover, another possible round of decreases in the US for the August domestic trading cycle (particularly for shredded and HMS I) has provided some mills with the confidence to continue lowering their prices.
This has become especially apparent in the Northern region, where shredded has fallen in value compared to its Central and Bajio counterparts. Usually Northern shredded sits atop the other two regions. This week it fell by MXN600/mt ($35/mt). It should be noted that DeAcero, one of the largest steelmakers in Mexico with several mills across the country, bought five shredders from Italian manufacturer Danieli Group a couple of years ago. In January, DeAcero started commissioning them, as in the case of the shredder in the state of Aguascalientes, in Central Mexico.
This, along with the company's higher consumption of metallics, such as pig iron, in their steelmaking mix, has also helped to diminish scrap consumption. It remains to be seen if the further commissioning of all five shredders across the country continues to suppress shredded prices. Some contacts in the Bajio region already report ample supply of shredded material.
In Northern Mexico, the price of #1 busheling dropped by MXN200/mt ($11.5/mt) to MXN6,900/mt ($398/mt) delivered consumer, HMS I was unchanged at MXN5,600/mt ($323/mt) delivered, while P&S 5ft dropped by MXN200/mt ($11.5/mt) to MXN6,200/mt ($358/mt) delivered, shredded, as mentioned above, decreased by MXN600 ($35/mt) to MXN6,900/mt ($398/mt) delivered. Machine shop turnings (MST) remained flat at MXN4,600/mt ($265/mt) delivered.
Underlying all of the bearish sentiment across the country is the soft state of the domestic rebar market. Rebar prices and demand have decreased in the past few weeks, with the former falling by MXN500/mt ($29/mt) to an approximate national average of MXN15,000/mt ($866/mt) ex-Mexico mill.
Prices in Central Mexico were sideways across the board. #1 busheling prices in Central Mexico remained at MXN6,500/mt ($375/mt) delivered consumer while HMS I was unchanged at MXN5,700/mt ($329/mt) delivered. Prices for P&S 5ft were flat at MXN6,100/mt ($352/mt) delivered, shredded prices were unchanged at MXN7,100/mt ($410/mt) delivered, and MST prices remained at MXN4,500/mt ($260/mt) delivered.
In Bajio, scrap prices were also unchanged on all grades. The price of #1 busheling was flat at MXN6,700/mt ($387/mt) delivered consumer, while HMS I prices remained at MXN6,000/mt ($346/mt) delivered, and P&S 5ft stayed at MXN6,200/mt ($358/mt). Shredded prices sit at MXN7,300/mt ($421/mt) delivered, and MST at MXN5,200/mt ($300/mt) delivered.
$1 = MXN17.32
