Mexico’s Top Steelmaker to Boost Steel Output by 30%

SEATTLE (Scrap Monster): AHMSA, one of the largest steelmakers in Mexico announced plans to boost its steel output by 30%, further to lifting of U.S. steel tariffs.

According to Alonso Ancira Elizondo, president of the Board, the imposition of tariff had resulted in the company’s export production capacity drop by almost one-fourth. Now with the U.S. deciding to withdraw the tariffs, the company has started receiving bulk orders from customers. AHMSA plans to return to pre-tariff production levels within a period of three months, he said. Incidentally, the company’s exports had touched 454,000t in 2018, representing 12% of the total sales.

The anticipated steel production boost is mainly on the back of $40 million investment at its Coahuila integrated steel plant. The investment covers addition of a high-capacity ball mill and a jaw crusher and significant ramp-up in iron ore concentrate generation capacity. Moreover, the company plans to initiate operations at the Conchas Sur mine during Q1 next year, which in turn will double production.

The company had witnessed over 76% year-on-year decline in steel segment EBITDA during the initial quarter of 2019. The net sales too were down by 2.6%. The rise in average per tonne price of steel was almost offset by lower sales volume during the quarter. Higher raw material costs resulted in 8.2% jump in cost of sales. Consequently, the company’s steel segment posted an operating loss of $17.8 million in Q1 2019.