Foreign direct investment (FDI) in Mexico in the steel industry totaled $635 million in the first half of the year, the lowest figure in the last four years for the same period. However, in the second quarter, companies in the sector registered a divestment of $667 million, due to the sale of assets to a Mexican investor or the repatriation of profits to their countries of origin.
Data from the Ministry of Economy, analyzed by SteelOrbis, show that in the first quarter, FDI in the Basic Iron and Steel Industry was $1.3 billion, 30.7 percent less than the $1.88 billion of the same period last year.
With the divestment of $667 million, in the first half it totaled $635 million. This investment outflow is the second largest in the last 18.5 years (since 2006).
Because the information from the Ministry of Economy is only statistical, SteelOrbis contacted Canacero to find out if there were asset sales in its records. However, there was no response. A firm specializing in mergers and acquisitions was also contacted and said it was unaware of the sale of steel assets by foreign investors to Mexicans.
Although another specialist in the subject said that the negative figure in the statistics represents a repatriation of capital. “They are dividends or profits paid to the company's shareholders,” he commented.
The information from the Mexican government corresponds to the Basic Iron and Steel Industry, which are companies dedicated mainly to the primary smelting of raw iron and the manufacture of steel, ferroalloys, finished products in their same steel complexes such as tubes, posts, profiles, wire rod, cables, and rods. They are also companies that produce primary slabs from purchased pig iron.
In this regard, according to Canacero, the main companies in steel production in Mexico are those based in Luxembourg: ArcelorMittal, Tenaris TAMSA and Ternium. In addition to the Brazilian Gerdau.
Information from Ternium itself shows that in the second quarter of the year it paid dividends of $433 million. Ternium's sister company, Tenaris, paid dividends to its shareholders for $458 million. That was a total of $891 million, of which operations in Mexico contributed a proportional share to their relative share of the companies' global income.
It is important to highlight that in the last 18 years (since 2006), 14 have seen divestments in the steel industry. The top five were $272 million in 2019Q2, $313 million in 2020Q1, $349 million in 2023Q3, $667 million in 2024Q2 and $808 million in 2021Q4.