Steel Mills

ArcelorMittal May Idle Partial Operations at Mexican Steel Plant

March 28, 2015

ArcelorMittal may temporarily idle some of its operations at Lázaro Cárdenas, Mexico’s largest steel producer and slab exporter, according to reports by El Diario and BN Americas.

“ArcelorMittal Lázaro Cárdenas is considering a temporary idling of certain steel producing operations,” a company spokesman told BN Americas in an emailed statement. “However, we are still in discussions with various stakeholders and no official decision has been made. Any idling decision will not impact our ability to meet customer demand.”

Steel prices in Mexico have fallen 34 percent and imports have cost Mexican steel producers nearly five billion dollars, according to Alonso Ancira, outgoing president of the Mexican steel association CANACERO. CANCERO warned that that the volume of unfairly traded imports also threatens $15 billion of planned steel investments.

El Diario speculates that global overcapacity and the drop in steel prices has made steel production at Lázaro Cárdenas “unfeasible.” The threat of a shutdown is also thought to be an attempt to pressure the Mexican government to limit the volume of steel entering the country.

In December, the Economic Ministry of Mexico announced it would tighten the requirements for permit applications to import steel into Mexico. The Ministry has also launched 24 antidumping probes according to BN America.

Low oil prices are also affecting steel production and pricing in Mexico. An 11.5 percent budget cut at state oil firm Pemex is expected to result in a 10 percent reduction in steel product sales to the company. Pemex has also requested the price of steel products be lowered.

Lázaro Cárdenas facilities include a 4Mt/y pelletizing plant with four 220t electric arc furnaces, with a production capacity of 5.3Mt/y liquid steel, and two 220t ladle furnaces.