Data points show Texas-Mexico ferrous friendship

Economic and trade data point to steady and growing steel industry-related trade between the United States and Mexico, with the state of Texas being a leading player.

Becky Hites of Pittsburgh-based steel industry consultancy Steel-Insights LLC, in a mid-2017 presentation to the to the American Institute of Steel Technology (AIST) in Monterey, Mexico remarked, “The trade relationship between Texas and Mexico is worth nearly $200 billion per year,” and that “more than one-third of Texas’ exports go to Mexico, more than three times the next leading destination.”

NAFTA as currently configured means recyclers in Texas and other states within advantageous freight range can supply ferrous scrap to Mexico’s growing steel industry, which is heavily invested in scrap-fed electric arc furnace (EAF) production. According to Hites, who cited statistics from CANACERO (a Mexican steel industry association), more than 14 million tons of the steel produced in Mexico in 2015 was via the EAF route, compared to about 6 million tons of basic oxygen furnace (BOF) output.

Trade data gathered by the Census Bureau U.S. Department of Commerce and published by the United States Geological Survey (USGS) shows the Texas-Mexico connection specific to steel and scrap is strong.

In the first five months of 2017, Mexico was behind only Turkey as a destination for ferrous scrap exported from the United States. In those five months, some 718,000 metric tons of ferrous scrap valued at $189 million was shipped from the U.S. to Mexico.

Pertinent to Texas, Census Bureau data also shows the Laredo and Houston-Galveston customs districts as the busiest in the USGS Gulf Coast region for ferrous scrap shipped across the border in those five months. Those two customs districts shipped out 308,000 of the 479,000 metric tons that left the region, or 64.3 percent.