The competition with Chinese steel, along with a need for natural gas which is yet to be 100 percent met, has resulted in ArcelorMittal Mexico operating at 60 percent of its capacity, according to a media report.
According to the company’s general manager, Victor Cairo, one of the company’s major problems is the lack of natural gas to supply its operations.
By not having sufficient natural gas to supply its operations, ArcelorMittal Mexico can’t increase production volumes, he said, while adding the company expects the country to finish installing new gas pipelines, so production volumes could resume.
Cairo said ArcelorMittal could increase its production in Mexico by 2 million mt/year if there were sufficient supplies of natural gas. ArcelorMittal Mexico is said to be producing about 4 million mt/year, but it could produce up to 6 million mt/year if it had more energy supply.
As Mexico increases natural gas output, local steelmakers and steel pipe producers expect to raise their production volumes.
Steel pipe producer Tubacero said recently it is seeking to provide about 1,500 km of tubes for more natural gas projects in Mexico, as the country’s Los Ramones Phase 2 project concludes. Tubacero said it expects to participate in a public tender to be one of the providers for the Texas-Tuxpan gas pipeline, which is expected to have 800 km steel pipes. The maritime pipeline will connect south Texas to Tuxpan, in the state of Veracruz.
In addition to the Texas-Tuxpan gas pipeline, Tubacero said it expects to provide steel tubes for the following projects: Samalayuca-Sásabe, Tuxpan-Tula, Villa de Reyes-Aguascalientes-Guadalajara and the El Encino-La Laguna gas pipeline. The company also said it invested $40 million at its pipe coatings plant in the city of Salinas Victoria, near its steel complex located in the city of Monterrey.