Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Altos Hornos de México (Ahmsa) has announced a partnership with 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, Davis Index learned. Both steelmakers have 90 days to structure the agreement, the source added, without disclosing further details.


The agreement will be signed by Julio César Villarreal, chief executive officer at Villacero, and Alonso Ancira Elizondo, president at Ahmsa. On May 28, 2019 a corruption probe in Mexico implicated Elizondo and Emilio Lozoya, a former executive of state-owned oil company Petróleos Mexicanos (Pemex). The Ahmsa chief is currently under house arrest in Spain. 


Ahmsa is currently working at 60pc of its capacity as the demand for steel products improves slowly in Mexico. The company worked at 70pc of its capacity before the pandemic.


Mexico’s crude steel output could fall by 10-15pc this year to 16mn mt, compared to 2019 due to the effects of the pandemic. The country’s crude steel production dropped by 12.1pc to 1.4mn mt in April this year compared the same month last year, according to the World Steel Association. Crude steel production in April last year reached 1.6mn mt.

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