Consumption of finished steel products in Mexico grew more than three times the GDP and even in the last 12 months, it grew by double digits on 10 occasions. However, its momentum will be slowed down by the bureaucracy of the Mexican government due to the new rules for importing steel into the country, in which in some cases response times have multiplied seven times, four importers with various clients told SteelOrbis.
According to those interviewed, the delay of up to three weeks in responding to a procedure that must have a response of three days, has already caused some companies to stop their production lines due to the lack of imported steel.
In addition to the economic penalties for failure to deliver, importers have to pay high storage costs at customs for having the steel detained due to the lack of government authorization to introduce the steel to Mexico.
Since last April 15, the Ministry of Economy issued new criteria for the import of steel products, for this it is necessary to present an automatic import notice and for them they must present a “Mill and Quality Certificates” with all the product data, as well as price in dollars per kilogram.
In addition, steel importers must be registered in the government Registry of Importers of Steel Products, run by the Ministry of Economy.
“There is no way for them to tell us why they are rejecting the permits. Now, everything is trial and error. Nobody in the Ministry of Economy explains anything. We interpret the requirements and it is sent and it turns out that it is not correct and that translates into rejection of the import permits,” commented a steel importer for several clients in Mexico.
Those interviewed say that there are no defined criteria for authorization, because some applications with the same information are accepted, but the majority are rejected.
Another steel marketing and importing company commented that with the delay of up to three weeks in the government's response and the rejection response, one of its clients has already stopped one of its production lines.
In addition, another of the importers commented that due to the rejection of the permit, he had to pay $4,000 for storage because the steel is detained at customs at the seaport of Manzanillo, Colima.
SteelOrbis requested the spokesperson for the Ministry of Economy for an interview with the head of the Undersecretary of Foreign Trade, Alejandro Encinas. However, after two weeks, there was no response.
The delays in authorizing imports will have a strong impact. In volumes, the average monthly import of steel in the last 12 months was 1.1 million metric tons (MT), with a maximum of 1.26 million mt in July and a minimum of 848,000 mt last December. Last April alone (the most recent public figure) an average of 41 mt per day was imported, according to data from Canacero, reviewed by SteelOrbis.
In value, the monthly average in the last 12 months $2.75 billion was imported, with a maximum of $3.28 billion last June and a minimum of $2.28 billion in December. In April, the average daily import of finished steel products to Mexico was $94 million.
With 41 million tons per day or $94 million per day of imported steel, the production chain is moving. With a part paralyzed, in addition to the economic impact, there will be a fiscal impact because taxes on foreign trade, value added and income are no longer collected.