Some steel and scrap shipments in the Mexican states of Jalisco and Michoacan were disrupted by road closures today after the Mexican military killed a cartel leader on Sunday.
A military operation killed Nemesio Oseguera Cervantes, the leader of the Jalisco new generation cartel (CJNG), sparking retaliatory violence by cartel members. Reports of the cartel torching vehicles and buildings in the southwest of the country led to further road closures by police and military to limit damage.
A flat steel distributor selling to end-users in the area told Argus that they have halted shipments to the west and to the Bajio region — which includes the states of San Luis Potosi, Queretaro and Guanajuato, just north of the most-affected area. Steelmakers Deacero, Grupo Acerero, Grupo Simec and Suacero operate mills in Bajio. None have reported closures or production outages because of the violence.
A Bajio mill told Argus on Monday that some of their buyers closed warehouses further south.
Several scrap dealers and buyers reported to Argus that their truck-borne cargoes have been caught behind roadblocks.
Violence-related road closures stretched west from Guadalajara toward Puerto Vallarta and south to Manzanillo, Colima on Monday afternoon — the main import point for much of Mexico's Asian steel, according to traffic monitoring site Aliado.
Global steelmaker ArcelorMittal operates a 6.5mn metric tonne (t)/yr blast furnace and electric arc furnace complex in Lazaro Cardenas, Michoacan, about 200 miles southeast down the coast from the port of Manzanillo. No damage or effect on operations has been reported at Lazaro Cardenas as of press time. Long steelmaker Grupo Simec also operates an EAF mill in Guadalajara.
Operations were unaffected further north in the northeast and central steel-producing and scrap-consuming regions.
