Mexico Metals Report Q4 2014
Strengthening economic growth in Mexico over the next five years will underpin production and consumption growth of Mexican metals, particularly steel. While weaker-than-expected economic activity in H114 prompted us to downgrade our 2014 real GDP growth forecast from 3.1% to 2.6%, we expect the economy to accelerate markedly in H214 and 2015, driven by a recovery in the construction sector, stronger manufacturing exports, and an improvement in real private consumption. For 2015, we forecast real GDP growth of 3.7%, and for average annual growth of 3.8% in 2016-2018. These factors should ensure Mexico remains the second-largest producer and consumer of steel in Latin America, behind Brazil.
Mexico's auto sector in particular will continue to attract investment and see production growth given its exposure to the US, the world's largest autos market, and Latin America, which will see growing demand for autos. Reforms to the country's energy sector lead us to forecast an uptick in oil and gas infrastructure investment and therefore increased consumption of steel used in pipelines and other equipment. We recognize the potential is large, and will thus monitor investment into the country's oil and gas industry, as well as a concurrent uptick in production and consumption trends, over the coming quarters.
Steelmaking will dominate...
The Mexico Metals Report has been researched at source, and features latest-available data for steel, aluminium and other major globally-traded commodities. Our analysis covers all primary indicators, including production, exports and price, with our forecasts underpinned by Business Monitor International (BMI)'s macroeconomists global economic outlook. The report analyses trends and prospects and critically evaluates latest industry news, trends and regulatory developments in Mexico.
BMI's Mexico Metals Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the metals industry in Mexico.
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BMI Industry View
Summary of BMI's key forecasts and industry analysis, covering metals production and prices, plus analysis of landmark company developments and key changes in the regulatory environment.
SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis of the state's metals sector, business environment, politics and economics, which carefully evaluates the short- and medium-term issues facing the industry.
Global Metals Market Overview
Global demand, supply and price forecasts for steel and aluminium, as well as gold, copper and tin, drawing on both our industry expertise and our macroeconomic and financial market team's long-term global demand forecasts and shorter-term market views.
Historic data series and forecasts to end-2018 for all key industry indicators (see list below) supported by explicit assumptions, plus analysis of key downside risks to the main forecast.
Production (`000 tonnes, US$bn), consumption (`000 tonnes, US$bn), exports (`000 tonnes, US$bn); prices (US$/tonne), and growth (%).
BMI forecasts to end-2018 for headline country macroeconomic indicators, including real GDP growth (%), GDP per capita (US$), population (mn), industrial production index (% y-o-y average) and unemployment (% of labour force).
Expansion of the automotive, manufacturing, construction, and oil and gas sectors, all of which rely on steel and other refined metals as input s , will enable steady production and consumption growth for Mexico's metal sector to 2018. Domestic steel producers will contend with cheaper foreign imports and US duties on Mexican exports , though investment into and output from the sector is unlikely to face significant risks.
BMI Industry View
Steel: Metals-Intensive Growth
Domestic And Foreign Steelmakers To Grow Production
Imports To Increase
Table: Steel Production & Consumption (Mexico 2010-2018)
Table: Steel Industry Historical Data (Mexico 2005-2012)
Business Environment To Remain Supportive
Anti-Corruption Efforts Remain Priority
Table: Political Overview
Table: BMI Steel Price Forecast
Surplus Set To Slim
Production: Reining In Growth
Consumption: Deceleration Ahead
No Respite From Chinese Exports Over Coming Months
Arbitrage Set To Grow Between East And West
Risks To Price Outlook
Table: Steel Data & Forecasts
Table: Global Steel Prices By Region & Product, USD/tonne (average)
Table: Mexico - Major Metals Producers
Latest Financial Results
Table: ArcelorMittal - Key Financial Data
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