Mexican steelmaker Altos Hornos de Mexico (Ahmsa), expects steel demand to improve in the second half of 2020 amid a recovery in steel prices and the enforcement of the United States-Mexico-Canada Agreement (USMCA).
The company, which reported its Q1 2020 results on Friday indicated that steel exports could rise in H2 2020 because of a better peso-dollar exchange rate, despite a weak Q1 2020 driven by low demand from the construction and manufacturing industries.
The company’s net sales dropped by 48.2pc to MXN8.1bn ($359.31mn) in Q1 2020 this year, down from MXN15.7bn during the same quarter last year.
Ahmsa reported a net loss of MXN5.2bn in Q1 2020, up from a net loss of MXN681mn in the Q1 2019. The steelmaker’s EBITDA loss increased to MXN122mn in Q1 2020 from MXN22mn during the same quarter last year.
On June 18, Ahmsa announced a partnership with the Mexican long steel producer Villacero, in a bid to resolve the former’s financial challenges. Under the partnership, Villacero will pay $300mn towards Ahmsa’s working capital initially to improve the steelmaker’s balance sheet.
Ahmsa is working at 60pc of its capacity as the demand for steel products is improving slowly in the country. The company worked at 70pc of its capacity before the pandemic.
($1=MXN22.54)