Mexico’s government is speaking with Asian steelmakers like Posco, Nippon Steel, Mistubishi, and Ternium to set up plants in the country that will produce steel for Mexico’s automotive industry.
Graciela Márquez Colin, Mexico’s Minister of Economy told local media that the deal would be developed under the new United States-Mexico-Canada Agreement (USMCA), which came into effect on July 1, 2020, replacing the 1994 North American Free Trade Agreement (Nafta).
The USMCA stipulates that to have access to the tariff-free trade, at least 70pc of steel and aluminum used to make the vehicles must be produced in North America and that 60pc of the vehicles’ content must come from the continent. The minister did not disclose further details about the matter.
Mexico’s car output, exports, and sales fell on an annual basis in June because of the COVID-19 pandemic and lower demand from North America and Latin America.
Car production fell by 29.2pc to 238,946 cars in June, down from 337,721 vehicles produced the same month the prior year, while exports dropped by 38.7oc to 196,173 cars, down from 320,470 cars shipped in June the last year, the National Institute of Statistical and Geographic Information (Inegi), said.
Mexico’s crude steel production is expected to fell between 10-15pc this year to 16mn mt, compared the prior year due to the effects of the COVID-19 pandemic.