Mexico Metals Report Q2 2014

Date: April 9, 2014
Pages: 47
US$ 1,295.00
Report type: Strategic Report
Delivery: E-mail Delivery (PDF), Download

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Includes 3 FREE quarterly updates

BMI Forecast: We forecast strengthening Mexican macroeconomic fundamentals from 2014 through 2018 will lead to solid production and consumption growth of steel. We expect expansion of the automotive, manufacturing, construction, and oil and gas sectors, all of which rely on steel as an input, through our forecast period as the Mexican economy continues to recover from recent economic weakness. Still, domestic producers are likely to face pressure from foreign imports, given global steel market overcapacity, though recent import rule changes should curtail the impact of cheaper foreign steel.

We expect strengthening macroeconomic growth, driven by growth in Mexican industrial activity, automotive production, and construction, to drive Mexico's metals industry. Indeed, we forecast real GDP growth of 3.3% in 2014, an uptick from observed growth of 1.1% in 2013. In particular, we continue to forecast an upswing in growth on the back of strengthening consumer confidence in both the US and Mexico. Mexico's auto sector will continue to see investment and production growth given its exposure to the US, the world's largest autos market, and Latin America, which will see growing automotive consumption. 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.
BMI Industry View
Metals SWOT
Industry Forecast
Steel: Metals-Intensive Growth
Domestic And Foreign Steelmakers See Promise
  Table: Mexico - Steel Production And Consumption ('000 tonnes, unless otherwise stated)
  Table: Mexico - Steel Production Data ('000 tonnes), 2003-2012
Regulatory Development
Recent Developments
Overall Business Environment To Remain Supportive
Tax Regime
Anti-Corruption Efforts Remain Priority
  Table: Political Overview
Commodities Forecast
Steel Price Forecast
  Table: BMI Steel Forecast
Short-Term Outlook
Core View
Global Steel Glut To Persist
Production: Rationalisation In The Long Term
Consumption: Growth Decelerating
Excessive Chinese Exports
Growing Arbitrage Between East & West
Risks To Price Outlook
  Table: Steel Data & Forecasts
  Table: Global Steel Prices By Region & Product, US$/tonne (ave)
Commodity Strategy
Iron Ore: Fading Iron Will
Steel: Global Glut To Weigh On Prices
Aluminium: Fundamentals To Remain Weak
Copper: All Eyes On China
Lead: Outperforming Its Troubled Peers
Nickel: Monthly Outperformer
Tin: Outperforming A Weak Field
Zinc: Further Consolidation Likely
  Table: Select Commodities - Performance & BMI Forecasts
Competitive Landscape
  Table: Mexico - Major Metals Producers
Company Profile
Company Strategy
Latest Financial Results
Company Details
Financial Data
  Table: ArcelorMittal - Key Financial Data
Cross Checks
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