The value of wholesale metal scrap sales at large collection depots in Mexico decreased 33.5 percent in March, year-over-year, in real terms. It is the worst contraction in the last 46 months (since June 2020), and it is also the 21st consecutive annual decline, a period that constitutes the worst recessive scenario for this industrial branch, according to SteelOrbis analysis of data from the national Inegi statistics.
The current recessionary period began in July 2022 and continues until March 2024. There are 21 months of contraction in sales. It is the worst recessionary period in at least the last 15 years. Until March, there were eight weeks with a falling price in wholesale sales of scrap in the north of the country and three more weeks with a stagnant price in the order of $406 dollars per metric ton of shredded scrap.
In the past there were three other recessionary periods, one of 12 consecutive months that ended in October 2013, another of 13 months that ended in July 2016, and another of 15 months that ended in June 2020.
The sale of metal scrap is of vital importance for the Mexican and global steel market. According to the steel company DeAcero, one of the largest steel companies in the country, 95 percent of the steel it produces is with that input.
Other steel companies that consume scrap in steel production are ArcelorMittal, Ternium, Grupo Acerero, Tyasa, Gerdau Corsa, Grupo Simec, TAMSA Tenaris, Frisa, Suacero, Altos Hornos de México (AHMSA), although the latter is paralyzed due to insolvency.
The Inegi information corresponds to the trade with wholesale sales of waste materials, which includes the sale of metal scrap, glass, plastic, paper and cardboard, among other reusable waste. The reported drop corresponds to the total activities. Of that total, metal scrap concentrated 68.4 percent of the total sales of said industry.