Mexico Metals Report Q4 2013
Published by Business Monitor International
on Oct 2, 2013
, 46 pages
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We expect Mexico's steel industry to grow in the coming years on account of strong domestic economic growth. We forecast steel-intensive growth in the automotive, construction and infrastructure sectors as Mexico's economy industrialises further. In a global steel market still facing overcapacity and low output prices, we believe Mexican steel producers will outperform others. However, as we expect steel prices to remain relatively subdued, production growth will lag behind consumption growth. We forecast annual steel production and consumption growth to average 4.9% and 5.3% over 2014-2017, respectively.
We expect continued metals sector growth in Mexico, particularly in steel, to feed domestic growth. The steelmaking industry comprises both domestic and foreign producers, with firms Altos Hornos and ArcelorMittal leading. Mexico's exposure to the US, which we forecast will outperform other developed economies, as well as Central and Latin America, should drive growth in the country's manufacturing base, particularly in the autos sector. Though we recently revised downward our GDP forecasts for 2013 and 2014, we remain optimistic on the country's medium-term prospects and see headline growth accelerating from 2015. Steel-intensive sectors, particularly construction and infrastructure, will benefit.