Ahmsa closure in Mexico squeezes US steel market

The continued closure of Mexican steelmaker Altos Hornos de Mexico (Ahmsa) is starting to cut supply from Mexico into the US steel market.

The company's 3.5mn short tons (st)/yr steel mill in Monclova, Mexico, has been shuttered since at least 29 November, when Mexico's state power company CFE cut the power supply to the company due to non-payment of electricity bills.

As US steel producers have raised prices, buyers who typically would turn to Mexican steel producer Ternium for lower priced material have found that steelmaker is having to curtail its sales to the US in order to cover demand in Mexico left by Ahmsa's absence.

The Argus US hot rolled coil (HRC) Midwest ex-works assessment rose by $22.50/st to $750/st Tuesday, reflecting higher mill offer prices after multiple price announcements since November.

Through November 2022 the US imported at least 1.24mn metric tonnes (t) of hot rolled coil, cold rolled coil, and hot dipped galvanized coil flat steel products from Mexico, according to data from Global Trade Tracker. In full-year 2021 that figure was 897,500t.

By Rye Druzin