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Ternium Mexico CEO Opens 6th Annual CONAC Conference and Exposition
03/25/2014 - The opening session of CONAC 2014 — 6th Steel Industry Conference and Exposition took place on Monday morning, 24 March, at Cintermex in Monterrey, N.L. Mexico. CONAC is sponsored by AIST’s Mexico Member Chapter.
Hugo Solis, president of the chapter, welcomed everyone to the event and outlined the schedule of events. He also spoke of the Member Chapter’s activities within Mexico, including employee training, student involvement, and promotion of the chapter through events and scholarships.
Maximo Vedoya, CEO of Ternium Mexico, then presented an overview of Mexico’s national steel industry in the morning’s keynote, “Panaroma Siderúrgica Nacional.” He first gave an overview of Ternium Mexico and discussed the company’s recent investment of US$1.1 billion in a new, 1.5-million-ton cold rolling facility and the 400,000-ton Tenigal galvanizing facility in Pesqueria, N.L.
He then discussed steel production in its global context. “World production has been growing, but in the last few years things have been slowing down,” he said. Slowed growth for China means that there will still be worldwide excess capacity, but the fact that U.S. production is growing is good news for Mexico. Mexican steel consumption in 2013 was down 9%, mostly due to a lack of construction spending, but Mr. Vedoya predicts that growth in 2014–2015 will resume a more natural pace, as steel consumption ex-China has actually declined slightly since pre-crisis 2007.
World overcapacity is estimated at 590 million metric tons, with capacities in the more balanced Americas, Africa and CIS countries still higher than consumption by about 40 million metric tons per region. Significant overcapacity in Asian countries (229 million metric tons), China (235 million metric tons) and Europe (89 million metric tons) has resulted in an increase in anti-dumping cases filed since 2009.
Bringing the focus back Mexico, Mr. Vedoya indicated that the GDP grew in Mexico after the crisis but has recently declined. GDP growth for 2014 is projected at 3.3%. Exports are growing, largely helped by the automotive industry, which should see production grow by more than 50% from 2013’s output level to an estimated 4,497,000 units in 2021. Home appliances should grow as well. The Mexican government plans to invest US$20 billion to improve the nation’s infrastructure over the next five years. Pipelines for energy production will be another important area of growth for steel consumption. In fact, Mexico’s steel industry invested US$2.5 billion in 2013 in an effort to meet these increasing consumption needs.
Since 1992, exports of steel from Mexico to the U.S. have been stagnant, between 6 and 12% of overall U.S. steel imports. On the other hand, since 1992, U.S. imports from China increased from 4% to more than 18% of the total, surpassing Mexico in 2003. Mexico’s proximity to the U.S. should be to its advantage, allowing the country to displace China's imports. This will also affect manufacturing employment in Mexico, which is key to overall GDP in any country. For instance, 30% of total GDP in Korea and China in 2012 was from manufacturing, whereas Mexico’s figure was at 18% and Latin America was at 15% overall. By developing products in Mexico, such as steel, the added value of products exported from Mexico will improve.
Mr. Vedoya concluded by calling for action regarding the world’s excess steel capacity, and for governments to remove themselves from constructing and owning manufacturing facilities such as steel plants. “A perceived solution to improving the economy by population employment has a long-term negative impact on the world's economic system,” he said. “There is positive growth for Mexico in the automotive and construction/infrastructure markets which will improve the national steel industry.”
CONAC 2014 runs through Wednesday, 26 March and features numerous technical presentations along with an exposition. For details about the event, visit http://conac.aistmexico.org.mx.
Maximo Vedoya, CEO of Ternium Mexico, then presented an overview of Mexico’s national steel industry in the morning’s keynote, “Panaroma Siderúrgica Nacional.” He first gave an overview of Ternium Mexico and discussed the company’s recent investment of US$1.1 billion in a new, 1.5-million-ton cold rolling facility and the 400,000-ton Tenigal galvanizing facility in Pesqueria, N.L.
He then discussed steel production in its global context. “World production has been growing, but in the last few years things have been slowing down,” he said. Slowed growth for China means that there will still be worldwide excess capacity, but the fact that U.S. production is growing is good news for Mexico. Mexican steel consumption in 2013 was down 9%, mostly due to a lack of construction spending, but Mr. Vedoya predicts that growth in 2014–2015 will resume a more natural pace, as steel consumption ex-China has actually declined slightly since pre-crisis 2007.
World overcapacity is estimated at 590 million metric tons, with capacities in the more balanced Americas, Africa and CIS countries still higher than consumption by about 40 million metric tons per region. Significant overcapacity in Asian countries (229 million metric tons), China (235 million metric tons) and Europe (89 million metric tons) has resulted in an increase in anti-dumping cases filed since 2009.
Bringing the focus back Mexico, Mr. Vedoya indicated that the GDP grew in Mexico after the crisis but has recently declined. GDP growth for 2014 is projected at 3.3%. Exports are growing, largely helped by the automotive industry, which should see production grow by more than 50% from 2013’s output level to an estimated 4,497,000 units in 2021. Home appliances should grow as well. The Mexican government plans to invest US$20 billion to improve the nation’s infrastructure over the next five years. Pipelines for energy production will be another important area of growth for steel consumption. In fact, Mexico’s steel industry invested US$2.5 billion in 2013 in an effort to meet these increasing consumption needs.
Since 1992, exports of steel from Mexico to the U.S. have been stagnant, between 6 and 12% of overall U.S. steel imports. On the other hand, since 1992, U.S. imports from China increased from 4% to more than 18% of the total, surpassing Mexico in 2003. Mexico’s proximity to the U.S. should be to its advantage, allowing the country to displace China's imports. This will also affect manufacturing employment in Mexico, which is key to overall GDP in any country. For instance, 30% of total GDP in Korea and China in 2012 was from manufacturing, whereas Mexico’s figure was at 18% and Latin America was at 15% overall. By developing products in Mexico, such as steel, the added value of products exported from Mexico will improve.
Mr. Vedoya concluded by calling for action regarding the world’s excess steel capacity, and for governments to remove themselves from constructing and owning manufacturing facilities such as steel plants. “A perceived solution to improving the economy by population employment has a long-term negative impact on the world's economic system,” he said. “There is positive growth for Mexico in the automotive and construction/infrastructure markets which will improve the national steel industry.”
CONAC 2014 runs through Wednesday, 26 March and features numerous technical presentations along with an exposition. For details about the event, visit http://conac.aistmexico.org.mx.
