Recent moves by the United States and Mexico to reduce the transhipment of mis-traded steel and aluminum from third countries are not seen as undermining the ability of U.S. steel companies to sell their products across the southern border in the near term, executives at U.S.-based Steel Dynamics Inc. said July 18.
SDI does not expect changes in trade dynamics in the near term, despite strong prospects for long-term steel demand from Mexico, according to President and Chief Operating Officer Barry Schneider.
“We expect that the products we currently transport into Mexico will continue to be transported this way,” he said. “There are shortages in the Mexican market due to other disruptions... so we will continue to pursue opportunities where it makes sense.”
Production at ArcelorMittal Mexico's main steel plant in Lázaro Cardenas, Michoacán, has been halted since late May due to an ongoing workers' strike.
While U.S. hot-rolled coil prices have faced pressure, falling about 41% since the start of 2024, SDI executives said said the company continues to see strong demand from its newest flat-rolled mill in Sinton, Texas.
“We see the market being receptive to the emergence of a regional supplier,” Schneider said.
Demand, in particular, is expected to outstrip domestic supply in the Mexican market.
“They're going to need our products,” Millett said. “In particular, they will need our coated products and downstream products, perhaps a little more than hot rolled products, but they will still be short. In general, I don’t see a material problem now.”
