Market conditions cause Mexican steel producers concern

Market conditions cause Mexican steel producers concern

Rising raw material costs and the extremely tight availability worldwide constitute great anxiety to the steelmakers almost all over the world. The international market has become very difficult to predict as any downturn or any further hike can be expected to happen anytime. In the meantime, the steel producers of Mexico are similarly worried about the uncertainties of the industry's future as the raw material scarcity is standing as a serious threat against their production. The pace of economic growth particularly in China is enhancing the price increases as well as creating availability problems for raw materials. After discussions and fights to overcome the oversupply in steel industry worldwide, this threat of raw material shortage and consequent production and pricing problems are blurring the picture. The fact that Mexico is dependant on imports of raw materials such as coking coal, metcoke and iron ore, the scarce availability of these commodities are inevitably worrying the Mexican producers. Even though crude steel production of the country keeps increasing gradually to reach 16 million metric tons in 2004, authorities cannot help but warn that the rising costs and material shortages are all damaging the competitiveness. On top of that the high energy costs also stand as an obstacle to appeal investment in the steel industry of Mexico.