Structural reforms and the start of infrastructure projects from the federal government will bring a boost in demand for steel in Mexico, said Verónica Orendain, manager of Heavy and High-Tech Industries of the Mexican Ministry of Economy, at a conference last week, adding that the level of federal spending on infrastructure will be much more active in the first quarters of the year.
"Some projects were stopped and some companies had significant financial problems by changes in social housing scheme," she said, but "there are internal measures which we hope will have a positive effect on economic growth and energy reform."
She added that the level of economic attractiveness in Mexico has sustained despite recent problems, and demand should improve through fiscal stimulus and financial reform. She said that the sectors of construction, automotive and machinery are the main purchasers of steel in Mexico and show better expectations.
The automotive sector has not grown for different reasons, including a weak domestic market, but she hopes that by 2019 Mexico will produce 4 million vehicles per year, without the intermediate production of auto parts involving steel.
In construction, she expects a significant growth of about 2.5 percent per year, after seeing years with slow activity.
The machinery and equipment sector forecasts, on the other hand, show higher growth. After growing by 2.9 percent from 2006 to 2012, the industry grew 10.9 percent in 2013 due to higher expectations.
The federal official said the government will continue to defend the industry against unfair trade practices, but they are always on the lookout not only for barriers that impose trade, but investigating cases where dumping is causing injury to the steel industry.
She said that in Mexico there are 23 investigations on countervailing duties against imports from Ukraine, China, Venezuela, Russia, Korea, the US, Brazil, and Japan.
