Steel Mills

Possible JFE-Nucor Joint Venture in Mexico

March 28, 2016

Japan steelmaker JFE Holdings and Nucor Corp reportedly are in talks to build a jointly run steel plant in Mexico. JFE plans to invest $264 million in the project, according to the Nikkei Asian Review.

The plant will have an annual capacity of 400,000 tons and will service the Mexican auto industry, supplying steel for car doors and frame components.

Nucor spokeswoman, Katherine Miller would not confirm the Nikkei report:

“We don’t comment on our involvement in any potential investment activity including joint ventures. Like most companies, we are always looking for good opportunities. We never limit ourselves when looking at the future, and are constantly evaluating unique market opportunities or product niches. If the right opportunity comes along, it has to fit our long-term growth strategy and provide the right return on the investment of our shareholders’ valuable capital.”

Mexico has been a destination of choice for steelmakers and auto manufacturers in recent years. Mexico automotive production reached 3.6 million units in 2015, an increase of 5.9 percent from the previous year with forecasts as high as 5 million by 2020. With low labor costs and free trade agreements that support tariff-free exports, Mexico is well positioned to provide automobiles to North America, Europe and South America. In 2015, 2.6 million vehicles were exported to the U.S. and Canada.