• INVESTMENTS: A new rule of origin in the US, Mexico and Canada trade agreement (USMCA) requiring automakers to purchase 70% of their steel from North America will force the three main Mexican producers to new investments, according to an analysis by Grupo Monex.
• CAPACITY: At the moment, both Ternium and AHMSA are the two companies producing steel for automakers in Mexico but a new plant by ArcelorMittal is expected to begin operations in 2020 in Michoacán. Also, Ternium is expected to open a new plant in Nuevo León in 2020.
• THREE: “Of the three main companies involved in the supply of specialized steels for the automotive industry, one of them, AHMSA, is in a vulnerable financial situation that would prevent it from allocating substantial resources to improve its capabilities in the short term”, Grupo Monex says.
• MELTED: Pending for final ratification both in the US and Canada in the coming weeks, the new USMCA also gives a seven year transition period for automakers to guarantee that the North American steel they use is “initially melted” within the region.
