Mexican steelmaker Altos Hornos de México (AHMSA) is operating at 30pc of capacity utilization.
However, per media reports citing distributors, the low capacity is not influencing domestic prices. According to Monterrey-based distributors, domestic prices will not decrease even if AHMSA did not produce steel or increased its production capacity to 50-70pc since prices in Mexico are established according to international finished steel and raw materials references.
Mexico steel prices follow the benchmarks set by the US steel market where prices have increased by 260pc from $500/nt ($551/mt) in August 2020 to around $1,800/nt at present, a gain of $1,300/mt. Thus, Mexican import and domestic prices have followed the US-led increases.
The higher prices of raw materials such as iron ore, ferrous scrap, and scrap alternatives which are imported as well as sourced locally at global market price levels, have also increased input costs.
AHMSA is navigating the legal requirements to merge with Monterrey-based Villacero and will be able to gradually regain capacity utilization once it receives additional operational funding.