International Steel Mills

CRU: Mexican steel sector investing billions to replace imports

March 28, 2024

Steel companies in Mexico have lined up capex plans totaling $5.7 billion in the next three years. The focus is on replacing imports with domestic production, said David Gutierrez, outgoing president of sector association Canacero.

“The investments are aimed at reducing imports, strengthening national production, and ensuring that the benefits stay in the country,” he was quoted as saying at Canacero’s annual congress by regional news service Business News Americas.

Steel shipments into Mexico last year rose 21.3% year-on-year to 12.5 million metric tons (mt), with the US accounting for 32.5% of the total, South Korea 15.5%, and Japan 14.9%.

The largest project underway is the slab mill Ternium is adding to its Pesqueria plant in Nuevo Leon state, northern Mexico, at a recently increased cost of $3.4 billion. That’s up from $3.2 billion previously.

The current $5.7-billion investment program follows on from $5.4 billion of capex projects in the past six years.

Canacero’s incoming president Victor Cairo commented: “I believe that the [steel] industry has a commitment to continue investing and growing, and that is why we believe that we’re going to continue working closely with the economy ministry to be able to strengthen trade practices with all countries and guarantee that we’re not a country of triangulation.”

That is reference to a claim that Mexico is being used as a route into the US market by steel producers in other countries. The Mexican steel industry and government deny that is happening.

This article was first published by CRU. Learn more about CRU’s services at www.crugroup.com/analysis.