Steel in Mexico Follow the Money Report¶

Opportunities for Change¶

Investments in the Mexican steel value chain are primarily concentrated in enhancing production capabilities, modernizing technology, and integrating sustainability, rather than extensive M&A or traditional VC funding in new ventures. The key opportunities for change receiving investment are:

Capacity Expansion and Modernization in Primary Production and Rolling:
- Major players like DEACERO are investing heavily (over US$1.5 billion) in new steel mills, including facilities for structural profiles and large-profile beams. These investments focus on incorporating modern Electric Arc Furnace (EAF) technologies.
- Ternium is investing in integrating EAF steelmaking with natural gas-based Direct Reduced Iron (DRI) technology, alongside expanding downstream capacity at its Pesquería facility for flat products.
- These investments aim to increase overall domestic production capacity, improve operational efficiency, and cater to growing demand, particularly from nearshoring activities.
Upstream Integration and Raw Material Security:
- ArcelorMittal's US$150 million investment to expand pellet production at its mining complex signifies a move towards greater control over raw material supply for integrated producers.
- The emphasis on EAF technology across new investments (DEACERO, Ternium) inherently increases the demand and strategic importance of high-quality steel scrap, driving opportunities in the recycling segment.
Value-Added Processing and Specialization:
- Tenaris's completion of a major coating project in Mexico enhances its capabilities in providing value-added services for specialized pipe products.
- Investments in new rolling mills and downstream processing by DEACERO and Ternium are geared towards producing more specialized and higher-value products like structural profiles, beams, and advanced flat products for sectors such as automotive and construction.
- The development of new steel alloys through advanced material science, while an ongoing trend, is receiving implicit investment as companies aim to meet demands for lighter, stronger, and more durable steels.
Enhanced Recycling and Circular Economy Practices:
- DEACERO's new mills are designed with circular economy practices in mind, reinforcing the importance of the scrap recycling loop.
- The entry of specialized ventures like the Sibanye-Stillwater Reldan Mexico Joint Venture, focusing on advanced metal refining and recycling technologies (thermal, mechanical, pyrometallurgical, and hydrometallurgical processing), indicates investment in more sophisticated recovery of valuable materials from industrial and electronic waste. This improves the quality and availability of recycled inputs for EAF steelmaking.
Technological Upgrades for Efficiency and Sustainability:
- The adoption of modern EAF and DRI technologies is a significant area of investment, aiming to reduce energy consumption and emissions compared to older methods.
- Mexican steel plants are increasingly investing in automation and digitalization to improve precision, speed, and efficiency across the value chain.
- While direct investments in hydrogen-based steelmaking are still nascent in Mexico, the global trend and sustainability pressures suggest this will be an area of future investment and opportunity for change. Investments in "green steel" initiatives are being discussed and pursued to curb emissions and meet international standards (e.g., EU CBAM).
Meeting Nearshoring-Driven Demand:
- A significant driver for many of the aforementioned investments is the nearshoring trend. Companies are investing to expand capacity and diversify product offerings to supply the growing manufacturing sector in Mexico, particularly automotive and other industries relocating or expanding their North American footprint.

In summary, investments are flowing into modernizing existing production assets, expanding capacity for high-demand and specialized products, securing raw material supply (especially scrap and pellets), and adopting technologies that improve efficiency and environmental performance. These opportunities are largely being pursued by established players through capital expenditures and strategic upgrades, along with some new entrants in specialized areas like advanced recycling.

Key Findings¶

Opportunity for Change	Key Investing Actors/Mechanisms	Value Chain Stages Impacted
Capacity Expansion & Modernization (Primary & Rolling)	DEACERO (New EAF mills, structural profiles), Ternium (EAF/DRI integration, downstream flat products)	Raw Material Sourcing (Scrap, DRI), Primary Steel Production, Semi-finished Products Casting, Rolling & Further Processing, Manufacturing & Fabrication
Upstream Integration & Raw Material Security	ArcelorMittal (Pellet production), DEACERO & Ternium (Increased EAF reliance on scrap)	Raw Material Sourcing & Processing, Primary Steel Production
Value-Added Processing & Specialization	Tenaris (Coating), DEACERO (Structural profiles), Ternium (Advanced flat products), General (Advanced material science adoption)	Rolling & Further Processing, Manufacturing & Fabrication
Enhanced Recycling & Circular Economy	DEACERO (Circular economy in new mills), Sibanye-Stillwater Reldan Mexico JV (Advanced recycling technologies)	Recycling, Raw Material Sourcing & Processing
Technological Upgrades (Efficiency & Sustainability)	Ternium (DRI integration), DEACERO (Modern EAFs), General (Automation, digitalization, green steel initiatives)	Primary Steel Production, Rolling & Further Processing, Energy Consumption, Environmental Impact
Meeting Nearshoring-Driven Demand	DEACERO, Ternium, Tenaris (General capacity and product diversification investments driven by manufacturing sector growth)	Manufacturing & Fabrication, Distribution & Commercialization, End Use Sectors (Automotive, Construction, etc.)

References¶

ArcelorMittal S.A.: ArcelorMittal reports fourth quarter 2024 and full year 2024 results. https://www.globenewswire.com/news-release/2025/02/06/2995721/0/en/ArcelorMittal-S-A-ArcelorMittal-reports-fourth-quarter-2024-and-full-year-2024-results.html
ArcelorMittal will invest to expand pellet production in Mexico - SteelRadar. https://steelradar.com/news/arcelormittal-will-invest-to-expand-pellet-production-in-mexico
DEACERO Announces Modern and Sustainable Steel Mill Project in Coahuila - Promexico Industry. https://mexicoindustry.com/en/news/industry/deacero-announces-modern-and-sustainable-steel-mill-project-in-coahuila
DeAcero Announces Investment of 12 Billion Pesos. https://www.mexico-business.com/news/industry/deacero-announces-investment-12-billion-pesos
DeAcero will invest US$587 million to increase its production capacity - MEXICONOW. https://mexiconow.com/story/deacero-will-invest-us587-million-increase-its-production-capacity
Mexican DeAcero invests $600 million in structural profiles plant - Steel Orbis. https://www.steelorbis.com/steel-news/mexican-deacero-invests-$600-million-in-structural-profiles-plant-id250671.htm
Mexican industry invests in green steel future as route to curb Chinese imports: ExpoAcero. (2025-04-03).
Reldan | Metal refining and recycling - Sibanye-Stillwater.
Sustainability Report 2023 | Ternium. https://www.ternium.com/en/about-us/sustainability/sustainability-report-2023
Tenaris Announces 2024 Fourth Quarter and Annual Results. https://ir.tenaris.com/news-releases/news-release-details/tenaris-announces-2024-fourth-quarter-and-annual-results
Ternium Announces Fourth Quarter and Full Year 2024 Results - Nasdaq. https://www.nasdaq.com/press-release/ternium-announces-fourth-quarter-and-full-year-2024-results-2025-02-18
Ternium Announces Fourth Quarter and Full Year 2024 Results. https://www.ternium.com/en/investors/events-and-presentations/events/event-detail/2025/Ternium-Announces-Fourth-Quarter-and-Full-Year-2024-Results/default.aspx
The resilience of steel: Navigating the crossroads - McKinsey & Company. (2023-04-18).
Value Chain Report on the Steel Industry in Mexico. (Internal Document/Assumed from context of prior analyses)