MEXICO CITY Mexicos largest integrated steelmaker, Altos Hornos de México SAB de CV (Ahmsa), expects domestic prices to fall by 20 percent over the next few months on the back of "unfair trade practices" from countries in Asia and the Commonwealth of Independent States (CIS).
Prices have already fallen some 20 percent this year due to downward pressure from Chinese, Indian, Russian and Ukrainian shipments, Ahmsa sales and marketing director Miguel Elizondo told AMM sister publication Steel First.
In the first nine months of 2012, those four countries shipped to Mexico about 255,000 tonnes of steel products similar to those manufactured by Ahmsa, including hot-rolled coil, cold-rolled coil, plate, tinplate and structural sections, nearly triple the 91,350 tonnes shipped in the same period last year, Elizondo said.
Imports from other countries also have been rising in 2012, with Ahmsa identifying a "significant increase" in importsmainly plate, hot-rolled coil, cold-rolled coil and structural sectionsfrom South Korea.
To compete with importers using what Ahmsa described as "unfair trade practices," the company said it will require the help of the new government of Enrique Peña Nieto, who became president Dec. 1.
Monclova, Mexico-based Ahmsa expects Peña Nieto to provide the steel industry with "protection against unfair imports, mainly from China, through taxes or duties."
At the same time, the government should create laws "that (public) works carried out in our country should have a minimum local content of 60 percent, similar to (legislation in) the United States."
Steel theft also has been a concern for the integrated steelmaker, which has been the victim of dozens of thefts of semifinished steel products and raw materials, and Ahmsa has already asked Peña Nieto to improve security across the whole country. Figures published by Mexican national steel association Canacero show that the value of steel stolen from Mexican roads between early 2010 and mid-2012 totaled 600 million pesos ($46.5 million).
Despite the pressure from steel imports and domestic thefts, Ahmsa anticipates "dynamic growth" in the Mexican market in the first few months of 2013, driven by the companys Fénix project, which will increase its crude steel production capacity by about 40 percent.
Estimated to cost about $1.5 billion, the Fénix project comprises a 1.46-million-tonne-per-year blast furnace, which came on-stream last year, as well as a new 1.2-million-tonne electric-arc furnace, a 1.2-million-tonne slab caster and a 1-million-tonne plate mill. The expansion project continues to advance, and its new facilities will gradually come into operation from early 2013 onward, Elizondo said.
Ahmsa wants to increase its steel output to supply high demand in the machinery, mechanical equipment, rail, automotive and construction sectors.
A version of this article was first published by AMM sister publication Steel First.