Mexican steelmakers, including Gerdau Corsa, Altos Hornos de Mexico (AHMSA) and Fisacero, are concerned about the effects of coronavirus on the steel market, as producers continue to reduce output.
Daniel Riojas de la Garza, sales subdirector at integrated steelmaker AHMSA said in a webinar accessed by SteelOrbis the company is currently operating at 60 percent its capacity of 5.5 million mt/year of crude steel. As previously reported by SteelOrbis, AHMSA had “adjusted” production levels and suspended activities at mining company Minera del Norte.
Fisacero, which produces low, medium and high carbon steel strips, as well as electro galvanized steel strips, said steel-related companies will eventually need capital support to keep up their operations.
“I see that (Mexican) banks are aiding smaller companies. I think that (banks) are going to be forced to help out a little more to provide (among other things) working capital. If everybody stops (production) for three or four months, or whatever it takes, companies will run out of cash and will stop making payments. Cash flow will help these companies to survive this crisis,” said Fisacero’s CEO, Carlos Alanis.
The Mexican subsidiary of integrated steelmaker Gerdau, Gerdau Corsa, noted access to credit has become more difficult.
“In the first week of the crisis, some of the banks were still offering credit lines to the market. But two weeks ago, it changed completely and Mexico is now seen as a risky (country) again,” said Lucas da Rocha, sales director at Gerdau Corsa.
The panel also discussed the role of the Chinese steel industry in Mexico after the pandemic crisis.
“They are going to be very aggressive, but they will target more (the Mexican) market with finished and processed products,” said Garza from AHMSA.
Elsewhere in Latin America, steel producers are proposing reduced wages, such as ArcelorMittal-owned Acindar in Argentina, and suspending output in countries where lockdowns became stricter.
Gerdau suspended activities at Argentina’s Sipar Gerdau Inversiones S.A, a long steel rolling mill in the province of Santa Fe, and Peru’s Siderperu, and halted blast furnaces.
Brazilian flats producer Usiminas and ArcelorMittal Brazil took similar measures.