For the tenth consecutive time, the production of iron pellets in Mexico remains in negative territory, decreasing 7.2 percent in October, year-over-year, to 544,883 metric tons (mt). This behavior was due to the losses registered in the regions of Altos Hornos de México (AHMSA) and in the area of the joint venture of ArcelorMittal and Ternium, Peña Colorada, according to an analysis by SteelOrbis of data from the national statistics agency Inegi.
The production of iron pellets is linked to the production of steel. In Mexico, steel production accumulated 10 consecutive declines until September (the most recent public information).
Of the three large mining regions producing iron pellets in Mexico, the most important, with 64.8 percent of all production, is located in the western state of Colima. In that entity, there is the Peña Colorada mining complex, a 50-50 joint venture of the Luxembourg-based steel companies: Ternium and ArcelorMittal.
In Colima, production was 353,041 mt, 7.1 percent or 26,816 mt less compared to October of last year. In the first 10 months of 2023, there are only two increases: May (+1.7 percent) and September (+7.5 percent).
In the region where ArcelorMittal México operates its Las Truchas mining complex in Lázaro Cárdenas, in the western state of Michoacán, production was 113,812 mt, 0.9 percent year-over-year. So far this year there have been six increases in production.
Michoacán contributed 20.9 percent of all October pellet production, according to Inegi data.
For the sixth consecutive time, the largest contraction in pellet production in Mexico was recorded in the northern state of Coahuila, the birthplace of the steel company Altos Hornos de México (AHMSA). In October, production was 78,030 mt, a volume that represented an annual drop of 17.2 percent or 16,232 mt compared to the same month last year.
It is the ninth consecutive annual decline in Coahuila. Since last May, production has decreased by double digits. In May it decreased 29.2 percent, in June 28.9 percent, in July 8.0 percent, in August 49.1 percent, in September 46.1 percent and in October 17.2 percent, year-over-year.
In October, the average value of the metric ton of pellets was MXN 1,403 pesos, a figure that at today's exchange rate represents $79.5/tm. In pesos, the price decreased 13.4 percent in nominal terms (without adjustment to eliminate inflation).