Mexico steel consumption down in 2022

Mexican steel consumption grew 9.1% in November year-on-year but fell 1.9% in the January-November period, mainly due to the construction sector's weak performance.

Local iron and steel association Canacero, which published the figures on Friday, expects steel consumption to be lower this year than in 2021.

Production, meanwhile, grew 4.8% in November but fell 1.2% in the accumulated 11 months.

In early December, ArcelorMittal's director of government relations, Noé Galván, told an industry event in Mexico City that steel consumption will decline 3.8% in 2022 and remain flat in 2023.

Galván added that investments in communication and transport infrastructure are key, as well as taking advantage of nearshoring opportunities to increase North American supply chain integration.

However, Ternium CEO and head of the World Steel Association’s economic committee, Máximo Vedoya, told a press conference during Canacero’s general assembly in November that “the consumption of steel from Mexico will grow around 3% in 2023,” citing Worldsteel’s October report.

Worldsteel projected that steel demand in the USMCA free trade area, covering Canada, the US and Mexico, will grow 0.9% this year and 1.8% in 2023.

“The global economy is affected by persisting inflation, US monetary tightening, China’s economic deceleration, and the consequences of Russia’s invasion of Ukraine. High energy prices, rising interest rates, and falling confidence have led to a slowing in steel using sectors’ activities,” Vedoya was quoted as saying in the report. He added that Mexico’s steel industry will not recover to pre-pandemic levels next year.

Worldsteel predicted a reduction of 2.3% in global steel demand for this year, compared to 2021, and a 1% rebound in 2023.

Canacero head and DeaceroCEO David Gutiérrez told the 2022 summit of regional association Alacero that producers should focus on products that are being imported rather than those that are in oversupply.

“In Mexico we are importers of steel, we produce less than we consume, and there is tremendous potential there,” Gutiérrez said.