WCA March 2018

From the Americas

Background on the Nuevo León steel mill project was provided by Mexico News Daily (Oaxaca) as well as by Milenio . Techint, founded in Milan in 1945 by the present Mr Rocca’s grandfather, entered the Mexican market in 1954 and strengthened its presence with the acquisition of steel manufacturer Hysla in 2005; together with companies Siderar and Sidor, Ternium was created. Two years later, Ternium consolidated with the purchase of the Mexican company Grupo IMSA for almost $3.3 billion. Ternium is now the largest steel company in Latin America, with production centres in Argentina, Mexico, Guatemala, Colombia and the USA. In Mexico, Techint has nine industrial plants and two mining operations as well as five service centres and 11 distribution centres. Last year it produced 3.5 million mt of steel in Mexico, accounting for 18.7 per cent of the nation’s total output. Techint employs 48,530 people around the world and earned profits in 2016 in excess of $15 billion. The conglomerate’s worth stands at just over $29 billion.  According to the National Chamber of the Iron and Steel Industry (Canacero), Mexico was the world’s 13 th largest steel producer in 2016 with a total output of 18.8 million mt. However, this was not enough to meet domestic demand. Mexico exported 4.5 million mt of steel in 2016 but imported 13.9 million mt. The domestic steel industry contributes 1.9 per cent of Mexico’s total gross domestic product (GDP), 6.2 per cent of industrial GDP, and 10.6 per cent of manufacturing GDP. With a two-year window for solving its electricity worries, South Australia pins its hopes on the world’s biggest lithium ion battery In March 2017, the question “How long before the lights go out in Australia?” was taken up by Bloomberg . In two years’ time, according to the Australian Energy Market Operator, which oversees Australia’s largest gas and electricity markets and power systems. Its projection covered the three states (New South Wales, Victoria and South Australia) that are home to almost two-thirds of the population of the nation. South Australia had already experienced a statewide blackout, in September 2016, the result primarily of a freak storm. Declared Bloomberg , “The incident highlighted the teetering nature of the electricity grid and a national energy policy that’s suffered through neglect.” Energy

Mr Stevenson reported that Honda aims to develop cars that can take enough power from the grid, in 15 minutes flat, for 150 miles of driving. While a little more modest than Porsche’s ambitions, the Japanese automaker’s plans nonetheless signal an increasing awareness among EV makers that their future lies with quick-and-easy charging of their vehicles. (“Not Just Porsche: Honda, Too, Wants 15-Minute Fast Charges for Electric Cars,” 6 th December) Last year, Honda introduced the two concepts Urban EV and Sports EV but did not publish charge times for possible production versions. According to Nikkei Asia Review, referenced by Green Car Reports , the company’s hopes for ultra-fast charging rest heavily with the development of battery technology that can handle it. Meanwhile, wrote Mr Stevenson, the Urban EV “will go into production in 2019 for sales in markets other than North America, where Honda likely sees it as too small to be popular.” Its steel output unequal to domestic demand, Mexico attracts investment by an Italian-Argentine conglomerate Ford Motor Co is not alone in appreciating the significance of Mexico to a company’s prospects. (See “Ford Motor Agreed to Renounce Mexico,” above.) On 8 th December, Techint Group (Buenos Aires, Argentina) announced that it will invest $1 billion to start up a new steel mill in Monterrey, in the Mexican state of Nuevo León. According to the Monterrey-based daily newspaper Milenio , the development of the hot rolling mill is part of an expansion of Techint’s industrial centre in the municipality of Pesquería, where the consortium started operations in 2013. Paolo Rocca, the Argentine-Italian CEO of Techint Group, said that the steel company Ternium, one of six Techint units, would undertake the project. (“US $1bn Steel Mill Announced for NL,” 9 th December) Expected to be operational in the second half of 2020, the plant will have an annual production capacity of 3.7 million metric tons (mt) of steel and manufactured products to meet demand mainly from the automotive industry, but also from the home appliance, machinery, energy and construction sectors. The run-up to the announcement suggests that Mexico is aware of its growing importance in the wider industrial world. Before making it public, Mr Rocca presented the plan for the steel mill to President Enrique Peña Nieto in a private meeting in Mexico City. A statement issued by Mr Peña Nieto’s office said that he recognised the global importance of Techint as well as its role in the Mexican steel industry. It also emphasised that Mexico’s economic stability allowed new opportunities of this kind to be generated. Steel

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Wire & Cable ASIA – March/April 2018