Mexican production of iron pellets decreased 5.1 percent, year-on-year, in May to 550,319 metric tons (mt), although Ternium and ArcelorMittal’s joint venture increased production by 3.4 percent.
The drop in iron pellet production in May is the fifth consecutive annual drop and the ninth drop in the last 12 months. Overall production of steel in Mexico has accumulated six consecutive annual decreases in May.
Of the three large mining regions that produce iron pellets in Mexico, the largest (65 percent of the total produced) is located in the state of Colima, in the Mexican Pacific. Consorcio Minero Benito Juarez Peña Colorada, a joint venture between ArcelorMittal and Ternium, produced 214,118 mt of pellets, 3.4 percent more than the volume in May of last year. That amount represented 38.9 percent of the total. The other complex is Las Encinas, wholly owned by Ternium, which in May manufactured 142,211 mt (25.8 percent of the total), 0.6 percent less than in May last year.
The second largest region, with 20.1 percent of total production, is also in the western state of Michoacán where ArcelorMittal operates. In May, production was 110,584 mt, 1.5 percent less than the same month last year.
The third region, with 15.2 percent of the total, is located in the northern city of Monclova, Coahuila, where the steel company Altos Hornos de México (AHMSA) operates. The production of iron pellets decreased 29.2 percent, totaling 83,406 mt.
In May, the average value of a metric ton of pellets was MXN 1,484 pesos, a figure that at today's exchange rate represents $85.5/mt. In pesos, the price decreased 18.5 percent in nominal terms (without adjustment to eliminate inflation). At present value (adjusted to eliminate the inflationary effect), the May price is the lowest in the last 65 months, since January 2018.