At the press conference concluding Alacero’s annual conference this week in Monterrey, Mexico, SteelOrbis asked Gustavo Werneck if he expects the US supply glut will that harm import opportunities in Mexico.
“The US is currently dealing with a supply glut, especially on the flat rolled side," SteelOrbis asked. "Current capacity utilization is in the low 70s, there are mills that are offline for planned maintenance, lead times are short, prices are falling, and there is a significant amount of new EAF capacity that’s scheduled to come online within the next 12-16 months. Yesterday, one of the panel speakers said he felt there was additional opportunities to export steel into the US, and he also mentioned that there are opportunities for new capacity in Mexico, that could help offset the country’s need to import steel. How—if at all —do you feel the US supply glut will impact Latin American steel exports to the US, and is there any concern that oversupply from the US could begin to flood the Latin American markets?"
Gerdau CEO Gustavo Werneck answered, "On the longs side, I still think there are opportunities for trade between the US and Latin America. A very important example of this was the decision by the American congress in passing the CHIPS act [which was designed to strengthen domestic manufacturing, design and research of semiconductor chips to augment the country's supply chain of semiconductor chips.] Our backlog is growing because we are getting more orders [from American clients] as they build new facilities in the US. Demand is expected for the coming years in the case of the long products."
Deacero CEO David Gutierrez agreed, adding that the partnership between Mexico and America has remained strong for the past 90 years.
"I think our countries complement each other and we help make each other more competitive," he said. "The relationship that Mexico and America have is very different than the relationship America has with the Asian countries."