Steelmaker Ternium expects a positive growth for the Mexican steel market, it said in a recent presentation to investors, adding that the Mexican economy should continue growing, despite NAFTA renegotiations.
Ternium said Mexico is currently the “most attractive steel market in Latin America,” with a growing consumption of flat steel since 2011. The company said Mexican growth will be fueled by the country’s growing light vehicle production, which is expected to reach 4.1 million units in 2017. Additionally, the home appliance and electrical equipment industries will grow as well, with a 6 percent and 2 percent increase in 2017, year-to-date, respectively.
Despite having acquired Brazilian slab producer Companhia Siderurgica do Atlantico (CSA), Ternium also said it continues to buy third-party slab from ArcelorMittal Lazaro Cardenas in Mexico. ArcelorMittal Lazaro Cardenas is Mexico's largest slab exporter.
“We are buying from Lazaro Cardenas 1.2 million mt of slab per year, and we will continue buying [slab] from them,” said Daniel Novegil, Ternium’s CEO.
“We will continue supplying our activities from Lazaro Cardenas from the same levels we had as for the past five, six years,” he added.
The executive estimated that out of CSA’s 5 million mt/year slab production, 1 million mt will go to the Brazilian domestic market, 2 million mt will go to Ternium’s galvanizing facility in the US (Calvert), and the remaining 2 million mt will either go to the Mexican market or sell to outside parties.
“I don’t see any important changes [in the amounts of slab we buy from ArcelorMittal in Mexico], except for issues not under the control of ArcelorMittal,” Novegil said.
As for the next five years, Ternium expects to “continue growing in the Mexican market,” at the same time it capitalizes on the integration of CSA into Ternium’s industrial system. In the same period, it should also continue the development of new high-end steel products and the intensive use of IT/IS to achieve breakthroughs in operational excellence.