Browse the complete Report on: Mexico Metals Report Q3 2010
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The Mexican steel industry has exhibited a rapid turnaround in recent months that should put it back on course to return to pre-recession rates of output in 2011 and raise crude steel production capacity to 32mn tonnes by 2020 compared with under 14mn tonnes in 2009.
In the first five months of 2010, Mexican crude steel output grew 34.8% year-on-year (y-o-y) to 6.9mn tonnes, with the recovery continuing at a steady pace amid a strong economic revival. With industrial exports surging, steel use is climbing. US demand for Mexico’s manufactured products rather than domestic consumption is driving the rebound, but with GDP growth of 4.4% expected in 2010, it is likely that the domestic market will also support growth in steel output through the production chain.
The improved performance in export markets is a turn-around from the poor expectations BMI had in the previous quarter, which were shared by Canacero, Mexico’s national iron and steel institute. We had expected any revival in Mexico’s steel production to largely come from stronger domestic demand as a result of the housing and infrastructure sectors with any growth likely to be the result of base effects from last year’s record contraction than a vote of confidence in the country’s growth story. Since then, the scenario has changed considerably,
The rapid growth has prompted BMI to revise up Mexico’s crude and hot-rolled output forecasts from 15.8mn tonnes and 12.8mn tonnes respectively to 18.0mn tonnes and 14.1mn tonnes, assisted by 51% growth in exports of semi-finished and finished steel to 5.2mn tonnes. By 2011, the Mexican steel industry should be operating at or above pre-recession levels as it takes advantage of increased exports, domestic growth and expansion in domestic production capacities at the expense of US capacity, which is expected to decline.
BMI expects future growth in steel exports to come from the country’s diversification to other markets in and outside Latin America. Increasing demand from European markets means that the industry holds a competitive advantage over other markets, which makes it profitable for metals producers to establish production units in the country. In addition to its proximity and trade ties with the US, companies investing in Mexico are attracted to its low manufacturing costs, a relatively stable currency and the emergence of an international standard compliant supplier base. In terms of the business environment, recent tax reforms show promising signs of simplifying bureaucracy and thus helping reduce corruption. Major infrastructure development initiatives by the government will further encourage new investment in the country. These factors, coupled with the fact the country has the largest number of free trade agreements in the world, undeniably position Mexico as a strong production base. The recovery from the economic crisis has put Mexico’s hopes of securing a higher rate of growth over the medium term back on track, with increased confidence that Mexico’s annual production capacity will meet the target of 32mn tonnes by 2020. The main downside is that Mexico could face increased inflationary pressure and rising prices of raw materials that could exceed those seen in 2008, before the economic crisis hit.
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Original Source : –Metal Market
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Browse All Business Monitor International Market Research Reports
The Mexican steel industry has exhibited a rapid turnaround in recent months that should put it back on course to return to pre-recession rates of output in 2011 and raise crude steel production capacity to 32mn tonnes by 2020 compared with under 14mn tonnes in 2009.
In the first five months of 2010, Mexican crude steel output grew 34.8% year-on-year (y-o-y) to 6.9mn tonnes, with the recovery continuing at a steady pace amid a strong economic revival. With industrial exports surging, steel use is climbing. US demand for Mexico’s manufactured products rather than domestic consumption is driving the rebound, but with GDP growth of 4.4% expected in 2010, it is likely that the domestic market will also support growth in steel output through the production chain.
The improved performance in export markets is a turn-around from the poor expectations BMI had in the previous quarter, which were shared by Canacero, Mexico’s national iron and steel institute. We had expected any revival in Mexico’s steel production to largely come from stronger domestic demand as a result of the housing and infrastructure sectors with any growth likely to be the result of base effects from last year’s record contraction than a vote of confidence in the country’s growth story. Since then, the scenario has changed considerably,
The rapid growth has prompted BMI to revise up Mexico’s crude and hot-rolled output forecasts from 15.8mn tonnes and 12.8mn tonnes respectively to 18.0mn tonnes and 14.1mn tonnes, assisted by 51% growth in exports of semi-finished and finished steel to 5.2mn tonnes. By 2011, the Mexican steel industry should be operating at or above pre-recession levels as it takes advantage of increased exports, domestic growth and expansion in domestic production capacities at the expense of US capacity, which is expected to decline.
BMI expects future growth in steel exports to come from the country’s diversification to other markets in and outside Latin America. Increasing demand from European markets means that the industry holds a competitive advantage over other markets, which makes it profitable for metals producers to establish production units in the country. In addition to its proximity and trade ties with the US, companies investing in Mexico are attracted to its low manufacturing costs, a relatively stable currency and the emergence of an international standard compliant supplier base. In terms of the business environment, recent tax reforms show promising signs of simplifying bureaucracy and thus helping reduce corruption. Major infrastructure development initiatives by the government will further encourage new investment in the country. These factors, coupled with the fact the country has the largest number of free trade agreements in the world, undeniably position Mexico as a strong production base. The recovery from the economic crisis has put Mexico’s hopes of securing a higher rate of growth over the medium term back on track, with increased confidence that Mexico’s annual production capacity will meet the target of 32mn tonnes by 2020. The main downside is that Mexico could face increased inflationary pressure and rising prices of raw materials that could exceed those seen in 2008, before the economic crisis hit.
About Us
ReportsandReports comprises an online library of 10,000 reports, in-depth market research studies of over 5000 micro markets, and 25 industry specific websites. Our client list boasts almost all well-known publishers of such reports across the globe. We as a third-party reseller of market research reports employ a number of marketing tools, such as press releases, email-marketing and effective search-engine optimization techniques to drive revenues for our clients. We also provide 24/7 online and offline support service to our customers.
Contact:
Ms. Sunita
7557 Rambler road,
Suite 727, Dallas, TX 75231
Tel: +1-888-989-8004
http://reportsandreports.blogspot.com/
http://reportsandreports.proarticles.co.uk/
http://reportsnreports.wordpress.com/
Original Source : –Metal Market
Buy Now : Market Research Report
