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Specialty steel key to Mexican industry: AIST

Keywords: Tags  Hugo Solís, steel, Mexican steel, Mexico, Association for Iron and Steel Technologies, AIST, Ternium Mexico, steel imports Canacero

MEXICO CITY — Mexican steelmakers must produce more specialty and value-added steel products, especially for the automotive sector, to replace imports that have been affecting the local industry, the president of the country’s Association for Iron and Steel Technology (AIST) told AMM sister publication Steel First

“Mexico must grow in specialty products,” Hugo Solís, who is also industrial director at Nuevo Leon-based flat steel producer Ternium Mexico SA de CV, said. “We have to go to the processing of steel and not only to the production of crude steel.”

Mexico can continue to manufacture more basic items, such as hot-rolled and cold-rolled coil, Solís said, but it should focus on such products as hot-dipped galvanized and other galvanized steel to help import levels go down.

The Mexican automotive sector is set to receive up to $16 billion in investments over the next few years, driving local vehicle output to as much as 4 million units per year, according to the Mexican ministry of the economy.

Vehicle output reached 2.88 million units for the whole of 2012, up 12.8 percent from 2.5 million units in 2011, according to national automotive association Amia.

“The automotive industry is a very demanding sector, (and) we have to be prepared for it,” Solís said. “If we are not prepared, imports will continue growing, and that’s what we have to avoid.” 

The Mexican steel industry will also need to produce specialized steel to reduce vehicle weight, Solis said, noting that the automotive industry is reducing vehicle weight by 7 to 10 percent for each new model.

For example, Yokohama, Japan-based Nissan Motor Co. Ltd. recently announced that its Infiniti Q50 premium sedan, on sale later this year, will be its first model to use a new, lighter grade of steel. “The newly developed 1.2-gigapascal steel is part of a broader goal of reducing vehicle weight and raising fuel economy through use of advanced steel technology,” the company said.

In January, Dearborn, Mich.-based Ford Motor Co. announced its plans to manufacture vehicles using ultra-high-strength steels or alternative materials, such as carbon fiber, to reduce vehicle weight.

Solís also noted that Mexican steelmakers have been asking the federal government to raise duties on steel products to stop the recent rise in imports. Temporary tariffs of 3 percent currently exist for some imported steel products, but Mexican mills want higher levels.

Solís said that the Mexican government must increase import tariffs as it had in the past. “(A few years ago,) imports had grown terribly ... and once the (3 percent) tariff was imposed, imports dropped again,” Solís said. This indicates that even a small tariff will allow the government to control imports, he said.

Members of the customs commission of Mexican steel association Canacero said in February that steel imports rose 40 percent year over year in 2012, a development that puts the whole Mexican steel industry at risk.

A version of this article was first published by AMM sister publication Steel First.

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