Steel Mills
ArcelorMittal, Ternium Invest in Mexican Steel
Written by Sandy Williams
September 29, 2017
Two new hot strip mills are in the works for the Mexican steel industry. Both ArcelorMittal and Ternium announced plans this week to make investments in their facilities to meet growing demand.
The announcements coincide with decrees by Mexican President Enrique Peña Nieto creating three special economic zones that offer tax breaks to companies investing in the regions. The areas include Lázaro Cárdenas, Puerto Chiapas in Chiapas state, and Coatzacoalcos in the Gulf coast state of Veracruz. Nieto hopes attracting business to the region will help alleviate poverty and provide up to 12,000 jobs in the next several years.
ArcelorMittal announced on Thursday a $1 billion, three-year investment in its Mexican operations. The program is focused on building ArcelorMittal Mexico’s downstream capabilities, sustaining competitiveness in its mining operations, and modernizing its existing assets.
The new hot strip mill planned at Lazaro Cardenas will take about three years to complete and will increase flat rolled steel production to 2.5 million metric tons annually. The new mill will provide coils to domestic non-auto and general industry customers.
ArcelorMittal Mexico currently produces 4 million metric tons of steel per year. The enhancements will meet increased demand and enable ArcelorMittal Mexico to raise its total production capacity to 5.3 million tons. Flat rolled steel production would total 2.5 million tons, long steel 1.8 million tons, with the remaining 1 million tons made up of semi-finished slabs.
ArcelorMittal Chairman and CEO Lakshmi Mittal welcomed the confirmation of the special zones by the Mexican government. “Our investment program is aligned with the Mexican government’s objectives and will enable us to benefit from the anticipated increased demand for higher-added-value steel products from domestic Mexican customers,” said Mittal. “It reinforces our long-standing presence in Mexico, will support the creation of approximately 800 new jobs and play an important role in bolstering economic activity in the region.”
“The investments will help us to meet the demand requirements for higher-added-value products we expect to see from domestic customers, which today are heavily dependent on imports, while continuing to support ArcelorMittal’s NAFTA operations by providing high-quality semi-finished steel slabs,” added Victor Cairo, CEO, ArcelorMittal Mexico.
Ternium is investing in a high-end hot rolling mill at its Pesqueria industrial center. The new $1 billion rolling mill will have an annual production of 3.7 million metric tons with an option to add another 1.1 tons with an additional small investment. Ternium anticipates start-up of the mill by the second half of 2020.
“The investment will constitute a significant technological upgrade to the country’s steel production capacity, enabling the expansion of Ternium’s product range to encompass a broader dimensional offering and the most advanced steel grades, with the aim at replacing high-value-added steel imports,” said the company in a press release.
“A new high-end hot rolling mill in Mexico is a logical next step after the addition of our new facility in Brazil, formerly known as CSA, to Ternium’s industrial system,” said Daniel Novegil, CEO of Ternium. “This new equipment, once operational, will integrate upstream with Ternium’s high-end steelmaking capacity in Brazil and downstream with the company’s state-of-the-art Pesquería facility. This will allow us to produce in Mexico technologically advanced products for the demanding and innovative automotive industry, as well as for a wide range of other industries like the home appliance, machinery, energy and construction sectors.”
Ternium is also planning a new $90 million steel bar production facility in Northern Columbia with an annual production capacity of 520,000 metric tons. The new mill is expected to be completed by the second half of 2019 and will expand Ternium’s Columbia reinforcing bar production to 720,000 tons.
Sandy Williams
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