Supplies of steel and scrap have been disrupted in southwestern Mexico
Some shipments of steel and scrap metal to the Mexican states of Jalisco and Michoacan were interrupted due to road closures today after the Mexican military killed the cartel's leader on Sunday.
As a result of the military operation, Nemesio Oseguera Cervantes, the leader of the cartel, was killed. The Jalisco New Generation Cartel (CJNG), which provoked retaliatory violence from cartel members. Reports that the cartel had set fire to cars and buildings in the southwest of the country led to further road closures by police and military to limit the damage.
A distributor of rolled steel products that sells to end users in the region told Argus that they have stopped shipments to the west and to the Baggio region — which includes the states of San Luis Potosi, Queretaro and Guanajuato, located north of the most affected area. The Baggio steel mills are owned by Deacero, Grupo Acerero, Grupo Simec and Suacero. No one reported any closures or production disruptions due to the violence.
The Baggio plant told the Argus news agency on Monday that some of its customers had closed warehouses further south.
Several scrap metal dealers and buyers reported to the Argus agency that their trucks were delayed behind roadblocks.
Violent road closures on Monday afternoon extended west from Guadalajara to Puerto Vallarta and south to Manzanillo, Colima, the main import point for most of Mexico's Asian steel, according to the Aliado traffic monitoring website.
Global steel producer ArcelorMittal produces 6.5 million tons of steel per year. (t)/year the blast furnace and electric arc furnace complex in Lazaro Cardenas, Michoacan, about 200 miles southeast of the port of Manzanillo. At the time of publication in the press, there were no reports of any damage or impact on the work of Lazaro Cardenas. Long-gauge steel manufacturer Grupo Simec also operates an electric steelmaking plant in Guadalajara.
Production was not affected further north, in the northeastern and central regions producing steel and consuming scrap metal.