During the first quarter of this year, the Mexican economy grew by only 0.9%, with forecasts for full-year 2022 of just under 2%. This is disappointing for an “emerging” economy that is yet to recover to pre-pandemic levels.
Light vehicle production contracted 6.6% during April compared to the same month last year, whereas year-to-date auto production grew 0.9%. The Mexican peso exchange rate has remained relatively stable at between MX$ 19.81 and MX$ 20.32 to the US dollar over the last 30 days.
The pronounced correction in LME aluminium prices has brought more scrap to the market at the same time as buyers are adopting a cautious stance amid a dropping market, demand uncertainty and elevated financing costs owing to higher interest rates. The resulting imbalance has led to bearish aluminium scrap markets for almost all grades.
Scrap grades employed in the production of automotive secondary alloys have retained their bearish tone while those used by the extrusion industry and rolling mills have lost significant steam compared to previous months.
Shipping continues to be a major challenge and an important consideration for yards when managing sales.