Mexico Metals Report Q2 2012
Full year results for Mexican steel production came in at 18.1mn tonnes, which marked growth of 8.6% for 2011. This level was slightly above our forecast for growth of 6.5% to 17.8mn tonnes as we had anticipated a slightly more substantial weakening of output towards the end of the year. Steel production was likely buoyed by the strong performance in the automotive sector, which saw vehicle production rise by 12.5% in 2011. Moreover, Canacero, Mexico's iron and steel industry association, reported that several producers have seen productivity gains since 2008 on the back of an organizational and administrative reorganization, which has resulted in some cost savings, and would have contributed to improving output. Most recent data shows that Mexican steel production growth reaccelerated in January and February 2012, rising by 4.7% and 6.1% y-o-y respectively, bringing the year to date average to 5.4% for the first two months of the year. Looking throughout the year, we belie...