Finished steel shortage, high steel prices, long delivery times to import steel, and the volatility of the Mexican peso against the US dollar are just some of the challenges being faced by the Mexican steel industry according to Mexico’s steel distributor centers (Conadiac).
Speaking with Davis Index, a spokesperson for the association said that the economic, political, and social uncertainty in Mexico is adding to these headwinds.
Still, steel consumption is expected to increase in the second half of this year due to stronger demand for infrastructure projects announced the government such as the Santa Lucia Airport, Dos Bocas oil refinery, and the Maya railway. According to Conadiac, these projects will require steel products such as wire rods and flat steel products like hot-rolled coil, cold-rolled coil, slab, flat sheets, and steel rail.
Mexico’s steel consumption is expected to increase by 7.5pc to 23.4mn mt in 2021, from 21.7mn mt in 2020, Oscar Montero, planning and global business development general director at Ternium Mexico said last month, adding that steel consumption will increase by 5.5pc to 24.6mn mt in 2022.
Steel use 2020 vs 2019
Mexico’s steel consumption for flat steel products fell by 14.2pc to 13.4mn mt in 2020, compared to the prior year, Conadiac’s spokesperson noted without disclosing figures from 2019.
Hot-rolled coil consumption declined by 10.1pc to 3.73mn mt in 2020 compared to 2019, while cold-rolled coil usage dropped by 7.3pc to 3.69mn mt in the same period. The consumption for long steel products also declined by 3pc to 8mn mt in 2020 against 2019 and the usage of welded pipes and seamless pipes dropped by 17.1pc to 757,143mt in the same period.
Mexico’s crude steel production fell by 2.8pc to 2.83mn mt between January and February, from 2.91mn mt produced in the same period of the prior year, according to figures from the world steel association.