Coronavirus linked to 15.9% drop in Mexican steel production in January

Two U.S. steel companies recently announced they were expanding in Mexico through acquisitions and facilities upgrades. The investments come despite recent drops in Mexican steel production related to the coronavirus.

Wisconsin-based Maysteel Industries is expanding sheet metal fabrication operations in Monterrey. The company’s new 200,000-square-foot campus in Monterrey will feature a streamlined layout designed around optimizing material flow.

Indiana-based Steel Dynamics Inc. announced on Monday it is acquiring Zimmer, a Monterrey-based recycling business. The acquisition will support Steel Dynamics’ new flat roll steel mill being developed in Sinton, Texas.

“We look forward to welcoming Zimmer to the Steel Dynamics family to further solidify our Southwest U.S. and Mexico growth strategy,” Mark D. Millett, president and CEO of Steel Dynamics, said in a release on Feb. 26. “Combined with our existing metals recycling presence in Mexico, the addition of Zimmer provides an expanded commercial presence in the region and strengthens our raw material supply strategy, allowing for cost-effective ferrous scrap procurement for our new Texas flat roll steel mill.”

Maysteel’s and Steel Dynamics’ recent transactions were bright spots for the steel industry in Mexico, which experienced a 15.9% decline in production during January.

Steel production for the month was 1.37 million tons, compared to 1.63 million tons during the same period in 2019, according to a recent report from the World Steel Association.

Part of the lower steel output in Mexico was due to slower production, as well as logistics bottlenecks in China related to the coronavirus, said Alma Iglesias Márquez, sales director for steel manufacturer Grupo Simec.

Guadalajara-based Grupo Simec manufactures steel for the automotive, construction and mining industries. Other large steel companies in Mexico include DeAcero, Tubacero, Altos Hornos de México, ArcelorMittal México and Ternium México.

Source: World Steel Association

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