Steel Markets
August 21, 2020
CRU: U.S. Sheet Exports to Mexico Resuming
Written by Eduardo Tinti
The latest CRU Global Economic Outlook indicates that Mexican auto production will not reach 2019 levels until 2023, with expectations that 2020 volumes will be down about 23 percent in 2020 and recover 19 percent in 2021. There is some near-term upside to the Mexican market as production returns to normality after the Covid-19-related shutdowns, which is benefitting U.S. steel sheet exporters.
The pandemic-driven slump in Mexican auto production led to a sharp reduction in the country’s steel sheet imports from the U.S. (see chart). Auto production in Mexico was nil in April and May. As a result, U.S. sheet steel exports to Mexico were 58 percent lower y/y in May. From June, Mexican auto production started to resume and contributed to a pickup in sheet imports from the U.S. Such a support to U.S. exports is expected to continue in the near term as, in July, Mexican auto production was reported higher y/y and anecdotal evidence suggests that August output is back to February levels.
