(Minews) - The Mexican steel sector has significant growth potential from several strong end markets, but demand could be hindered by growing competition from domestic producers and imports.
“[We] have been adapting to the changing dynamics of supplydemand, which in the past year has been very complicated due to growth at the world level,” according to Luis A Landois, sales sub-director at integrated
steelmaker Altos Hornos de Mexico SA de CV (Ahmsa).
Landois was speaking to delegates at Metal Bulletin sister title AMM’s 19th Annual Mexican Steel Forum in Cancun.
Overproduction globally is causing an increasing amount of imports into the Mexican market, Landois said, speaking through a translator.
The Mexican steel industry has been expanding due to the growing automotive industry, and regularly imports steel to meet that demand.
“This generates a lot of challenges for us,” Landois said, adding that the company has ramped up production and is planning to take measures to combat future imports, including investments in new projects, increasing value-added and working with the government on trade action.
However, steel imports cannot be totally replaced by domestic production, according to Sachin Shivaram, vp of commercial for Severstal North America.
“There’s no capacity in Mexico to produce all the sheet that the Mexican market is asking for,” he said, also through a translator. “I don’t think the situation will change in the next 10 years. For that reason, Mexico is very important for us.”
The Mexican steel industry is relatively more fragmented compared with its counterparts in Brazil, Japan and Russia, he added, noting that too many mills are chasing the same orders for certain commodity-grade material.
However, he said imports of high-grade material are still necessary. “We look at this market sector by sector.
Obviously, the automotive sector is the most attractive. [... ]But this is also the sector that will need more imports because of the lack of quality,” he said. “We don’t see a lot of import activity, though, for the
construction sector because these are very much at the commodity level.”
Some 40% of national consumption will be supplied by imported steel sheet, Shivaram said.
