[ferro-alloys.com]Executives for major steel mills in Mexico were calling for access to reliable sources of natural gas and a cohesive government industrial policy in order to boost the domestic industry on Monday.

While speaking at the Sixth Mexico Steel Congress held by Canacero, executives from Gerdau, ArcelorMittal, Deacero, Tenaris Tamsa, Ternium, Ahmsa and Minera Autlan expressed uniform desire to have reliable and cost-competitive sources of natural gas, particularly from Southeast Texas. In addition, the executives were all in agreement about a need for a comprehensive and cohesive industrial policy from the Mexican government.

The two needs were complimentary as the industrial policy would have a focus on infrastructure, which would help establish the pipelines needed to have access to the less expensive natural gas in the US.

"The lack of gas in Mexico has made power more expensive. We have gas in North America that is high quantity and good quality, which should be very cheap," according to Victor Cairo, CEO at ArcelorMittal Mexico.

Mexico has a competitive advantage with the natural gas in the Southeast of Texas, he added. "With access to the less expensive natural gas, Mexico will have competitive power."

In addition to more reliable power costs, the Mexican industry needs a "complete industrial policy" with a focus on developing infrastructure, Fernando Pessanha, executive director at Gerdau Corsa, said. Infrastructure will "feed the whole chain" as it will raise taxes, create jobs and supply crucial structural needs.

The infrastructure policy should also take a "made in Mexico" approach, according to Cairo. "There is a trade war and the US is taking a more aggressive position than it has the last few years. I don't see why Mexico should favor foreign material over the Mexican steel sector," he added. Gerdau's executive stressed there is a big opportunity for import substitution, pointing to foreign material representing up to 40% of the domestic consumption.

Moreover, ongoing trade tensions were expected to ease, according to the panel members. However, the country will have to work through the process of the US Section 232 tariffs and generate more exports.

Currently, with the 25% tariffs in place by the US, Mexican producers have shed some market share in the US but have been unable to register any increase in their domestic market shares as US mills have continued to export into Mexico at similar levels.

• [Editor:王可]