Japanese steelmaker Kobe Steel has announced that it has signed a memorandum of understanding with its trading affiliate Shinsho Corporation, Japan companies Metal One Corporation and Osaka Seiko Ltd, and US-based Republic Steel to consider establishing a joint venture in Mexico to process steel wire rod into steel wire of cold heading quality. The five companies will discuss and consider business plans for a joint venture aimed at starting operations in mid-2015.
According to Kobe Steel, auto production in Mexico reached 2.93 million units in 2013, nearly double the 1.5 million cars made in 2009, and solid growth is anticipated in the coming years. One after another, Japanese auto parts manufacturers are setting up operations in Mexico. This is creating increasing demand for cold heading quality steel wire, which is used to make automotive fasteners and other cold-forged parts.
Demand in Mexico for cold heading quality steel wire has so far been met mainly by exports from the US and Japan. Anticipating growing demand, the five companies aim to set up a production and sales unit in Mexico that can quickly supply high-quality steel wire to their customers.
