The start of the year has required more patience from aluminium scrap sellers. Domestic consumers have been slow out of the gate this January, with some resuming purchases as recently as the week beginning January 23 while others are still out of the market at the time of writing. Aluminium scrap buyers in Europe have also been cautious, to say the least, while their counterparts in Asia were slow into the Lunar New Year. That said, some Asian buyers started to re-emerge in the latter part of the final full week of January. Probably our best hope is that scrap buyers will soon pick up the pace.
Demand for copper and brass scrap has been steadily supported by interest from export buyers.
The Mexican auto industry has continued to recover from the COVID-related supply chain shock. Capacity utilization at domestic auto plants rose to 79.9% in 2022 after having dropped to 67.3% in 2020; prior to the pandemic in 2019, utilization was at 83%. There are high hopes that 2019 levels will be regained this year. The Mexican auto industry produced 3.31 million units in 2022 for a 9% increase over the previous year.
The Mexican peso continues to strengthen: at the time of writing, the exchange rate is MX$ 18.80 to the US dollar, having been as high as MX$ 18.66 on January 17. The strength of the peso is acting as a headwind for scrap exports and export yards’ margins.