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News Article

National Steel Producers Could Offset Trade Deficit: CANACERO

By Fernando Mares | Wed, 11/23/2022 - 16:40

David Gutiérrez, President, the National Chamber of the Iron and Steel Industry (CANACERO) said that the steel industry could offset Mexico’s trade deficit in the steel market with national production. Nevertheless, this mission will be impacted by external factors. 

During the 74th Ordinary General Meeting of CANACERO, Gutiérrez said that the steel industry will face a difficult period in 2023. He said that even though the national steel industry would be able to offset the existing trade deficit between exports and imports, companies will be impacted by international steel prices. “In volume, if we consider imports and that we can compensate them with national production, we could get by. Nevertheless, industry prices are set by international costs. The world could therefore impact the national industry,” Gutierrez said. 

Máximo Vedoya, CEO, Ternium, as well as Vice President, CANACERO, agreed and added that the future of the national steel industry is attached to the US, especially if a recession materializes. He said that there are factors that show a possible increase in steel demand, especially in the automotive sector, which will still demand the commodity despite widespread supply chain disruptions. 

According to Vedoya, there is more demand than production in the automotive sector. He said that looking at the industry’s stock, there are no available units because of the lack of semiconductors and other essential elements in the value chain. He furthermore highlighted that some factories stopped working entirely.

Vedoya perceived the construction sector as a “depressed” industry regarding steel consumption. However, Gutiérrez said that there are some sectors with growth potential, especially if Mexico can exploit nearshoring opportunities via the construction of industrial parks, as well as federal and local infrastructure projects.

Gutiérrez said that Nuevo Leon’s infrastructure projects offer opportunities. For example, the El Chuchillo II aqueduct, whose construction started on Sept. 1, 2022, and may be finished in July 2023, as reported by MBN. Mexico’s apparent steel consumption stands at 25 million tons, of which the El Cuchillo II aqueduct demands 100,000t, an important amount for CANACERO. 

Vedoya highlighted that there are no recent studies regarding steel consumption apart from that made by the World Steel Association in October 2022 saying that steel consumption in Mexico will grow up to 3 percent in 2023. 
 

The data used in this article was sourced from:  
MBN, El Economista
Photo by:   Yasin Hm
Fernando Mares Fernando Mares Junior Journalist and Industry Analyst