At the annual meeting of Mexico’s National Chamber of Iron and Steel Industry (CANACERO) this week, outgoing president Alonso Ancira noted that the drop in sales from companies such as Pemex have started to affect Mexican steel producers.
Low sales plus import competition have combined to cancel around US$5 billion in investments in Mexican mills.
"We trimmed and are adjusting and there are real threats of closure of some plants. There are real threats to some great plants for shutdowns," Ancira said.
In the last year the price of steel has fallen 34 percent, and according Ancira, in the last 90 days the situation has become more critical.
Guillermo Vogel, new president of CANACERO, acknowledged that like other suppliers, steel companies have had to renegotiate their contracts with Pemex downward.
"The 60 billion peso reduction in the budget assigned to Pemex definitely going to have an effect in steel purchases," said Vogel.