With a booming automotive industry and a growing GDP, Mexico’s steel consumption is expected to grow 1.6 percent in 2016, year-on-year, as opposed to a 6.5 percent decline estimate for the entire region in the same period. Despite the positive performance in 2016 as compared to its peers in Latin America, Ternium anticipates a volatile future for Mexico.
“What we had in Mexico in the past four years was very positive. We’re happy, but we could be more happy,” said Maximo Vedoya, CEO at Ternium Mexico.
“The political ambition of the new president, Enrique Peña Nieto, was extraordinary. At a given moment in the past few years much was talked about the Mexican moment, but for external factors and political mistakes, it didn’t materialize,” said Vedoya.
“The future in Mexico will be volatile,” he said, adding that “the industrial sector continues to grow with more investments from both segments that consume and don’t consume steel.”
Vedoya also predicted that there will be fewer infrastructure projects in Mexico in 2017.
“Mexico’s debt was 25 percent its GDP,” he noted, “and now it is reaching 50 percent.”
The US elections should put some pressure on the Mexican peso (MXN). Additionally, low oil prices weigh negatively on the reforms the country has to approve.
“Steel consumption continues to grow, however, estimates have been adjusted down,” Vedoya said.