Mexico steelmaking falling short says industry group

Mexican industry association the National Chamber of the Transformation Industry (Canacintra) says that from January to late October of this year, the steel price has increased by more than 260 percent and there are few signs it has peaked.

A write-up posted to the website of Taiwan-based steel producer Yieh Corp. quotes Carlos González Silva, a representative of Canacintra, as saying part of the problem stems from the legal and subsequent financial woes of Altos Hornos de México (AHMSA), which he calls the country’s largest steelmaker.

Having experienced bank account freezes and other interruptions, AHMSA is “well below its production level, and this is causing a great shortage of steel at the national level that negatively affects the economy,” according to the writeup.

Yieh Corp. quotes González Silva as indicating the rise in prices and the intermittent lack of types of steel has not yet shown up in national employment figures but says “room for maneuver is smaller.”

An overview of Mexico’s steel industry in 2020 prepared by trade association Canacero for the Organization of Economic Cooperation and Development (OECD) says late 2020 steel output demonstrated a “recovery path.”

However, for 2021 the group says it expected zero growth in the first quarter and 3.5 percent growth in output for the entire year. “This is due to lack in investment and consumption,” Canacero predicted.

In addition to the difficulties at AHMSA, global steelmaker ArcelorMittal in 2020 encountered scrutiny from a local government that threatened to disrupt production at its sizable Lázaro Cárdenas steelmaking complex.