Market Monitor Steel Mexico 2016

Market Monitor

  • Mexico
  • Steel

29th September 2016

External risk factors for the Mexican steel industry remain the volatility of the currency exchange rate and the impact of international metals prices.

 

  • In 2015 Mexico´s domestic steel production decreased 3.7%, to 18.2 million tonnes, the lowest amount in six years. Domestic production capacity decreased from 65.7% to 62.5% due to the suspension of activity in certain steel plants, as low-priced Chinese steel imports increased. Total steel imports rose by more than 10%, accounting for 47% of apparent national steel consumption. Mexico´s apparent steel consumption increased 6.6% in 2015.

 

  • On average, payments in the Mexican steel and metals industry take 90 to 120 days. Payment delays have increased over the last 12 months due to steel price volatility and slower economic growth. That said insolvencies have remained stable, and no increase is expected in the coming months. The level of protracted payments, however, is expected to remain high.

 

  • External risk factors for the Mexican steel industry remain the volatility of the currency exchange rate as well as international metals prices, together with uncertainty concerning China’s economic performance and oil price developments. International competitiveness of the Mexican steel industry is hampered by the subdued quality of infrastructure, informality that prevails in the recycling industry and energy costs.

 

  • As in previous years our underwriting stance remains cautious, especially due to potential exchange rate and steel price volatility. In order to accurately assess a credit limit application in this sector, we currently ask for audited financial statements for the year 2015 and management accounts for 2016. If audited financials are not yet available, we could consider year-end 2015 and 2016 management accounts signed by a company director, together with the most current interim financial information. Some underwriting cases can be supported by trading experience and/or guarantees or promissory notes (pagarés).

Related documents

Download
Market Monitor Steel September 2016

1012KB PDF

Related content

Global Economic Outlook - May 2016

Report

The turbulent waters that the global economy faced at the beginning of the year have calmed but the underlying issues persist.

Market Monitor - Chemicals - Mexico 2016

Report

The sector is highly exposed to the price volatility of oil-derived commodities and foreign exchange fluctuations due the lack of refining capacities.

Payment Practices Barometer Americas 2015

Report

One in three businesses surveyed in Brazil, Canada, Mexico and the United States reported that around one-fifth of the value of their B2B receivables is more than 90 days overdue.

© Atradius Collections 1999 - 2018

Disclaimer

The statements made herein are provided solely for general informational purposes and should not be relied upon for any purpose. Please refer to the actual policy or the relevant product or services agreement for the governing terms. Nothing herein should be construed to create any right, obligation, advice or responsibility on the part of Atradius, including any obligation to conduct due diligence of buyers or on your behalf. If Atradius does conduct due diligence on any buyer it is for its own underwriting purposes and not for the benefit of the insured or any other person. Additionally, in no event shall Atradius and its related, affiliated and subsidiary companies be liable for any direct, indirect, special, incidental, or consequential damages arising out of the use of the statements made information herein.