AHMSA Furnace Restarted After February Unplanned Outage

The Mexican flat-rolled steelmaker last month said that it had lost at least 20,000 tons of liquid steel production following an unprecedented cold snap across the southern U.S. and Texas.

The Lone Star state is a significant source of natural gas and electricity for Mexico.

The restart of the No. 5 furnace is another indication that Mexican output has largely returned to normal following February’s severe cold.

Another example: Ternium México declared “force majeure” on Feb. 15 because of severe weather and power outages. The company said during an earnings call later in the month that the event had cost it approximately 80,000 tons of production, but that operations had since returned to normal.

The snow and cold also significantly reduced operations at electric-arc furnace (EAF) steel mills in the southern U.S.

AHMSA operates two blast furnaces, the No. 5 and No. 6, in the northern city of Monclova in Mexico’s Coahuila state.

AHMSA’s No. 6 blast furnace remains idled, the spokesman said.

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The No. 6 furnace was not impacted by the cold weather. It was idled in 2020 because of market conditions.

The No. 5 furnace has capacity of 1.91 million tons per year and the No. 6 furnace annual capacity of 1.27 million tons, according to the Association for Iron and Steel Technology’s 2021 Directory of Iron and Steel Plants.

AHMSA makes hot-rolled coil, cold-rolled coil, plate, tinplate and structural shapes, per its website.

SMU does not publish Mexican steel prices. But the North American market, as gauged by SMU’s benchmark U.S. hot-rolled coil index, is testing historic highs.

SMU’s average hot-rolled coil price stands at $1,240 per ton, up 7.8% from $1,150 per ton a month ago and up 25.9% from $985 per ton at the beginning of the year.

Mexico is also an important supplier to the U.S. market.

Domestic steel consumers imported 3.01 million metric tonnes from Mexico in 2020, making Mexico the No. 3 source for foreign steel in the U.S. behind only Canada (4.76 million tonnes) and Brazil (3.67 million tonnes), Commerce Department figures show.

By Michael Cowden, Michael@SteelMarketUpdate.com