Mexico manufacturing extends contraction in March

Market: Agriculture, Coal, Metals, Oil products
02/04/25

Mexico's manufacturing sector contracted for a 12th consecutive month in March, with production and employment both deepening their slides, according to a survey released today.

The manufacturing purchasing managers' index (PMI) ticked up to 47.2 in March from 47.1 in February, but remained below the 50-point threshold between contraction and expansion, according to the latest PMI survey from the finance executive association IMEF. Manufacturing, which accounts for about a fifth of Mexico's economy, is led by the auto sector, contributing about 18pc of manufacturing GDP.

Within the manufacturing PMI, the new orders index rose by 1.3 points to 45.3, still deep in contraction. Meanwhile, production fell by 0.6 points to 44.6. The employment index also declined 0.6 points to 46.4 in March, now in contraction for 14 consecutive months.

Meanwhile, the non-manufacturing PMI — covering services and commerce — declined 0.8 points to 48.8 in March from 49.6 in February, holding in contraction for a fourth consecutive month.

Within the non-manufacturing PMI, new orders fell 1.5 points to 48.2 and production declined 1 point to 47.5 with employment down a point as well in March to 47.5, as all three pushed deeper into contraction.

In contrast, the inventories component rose 3.5 points to 50.6 into expansion territory in March. But this may be the result of company strategies to stockpile inventories ahead of US tariffs and the reciprocal measures Mexico is set to announce on 3 April, IMEF technical advisory board member Sergio Luna said.

PMI data show that the economic stagnation that began in late 2024 persisted through March, with results from January and February pointing to a sharp slowdown in the first quarter, IMEF said. This follows annualized GDP growth of 0.5pc in the fourth quarter of 2024, slowing from 1.7pc in the third quarter, according to national statistics agency data.

Luna said concerns over US tariffs continue to drive much of the uncertainty reflected in the PMI data. Internal factors — such as reduced government spending to contain the fiscal deficit and investor unease over judicial reforms passed last year — are also weighing on activity, Luna added.

By James Young

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13/05/25

UK TRA proposes 40pc cap on other countries' HDG

London, 13 May (Argus) — The UK Trade Remedies Authority (TRA) has recommended the imposition of a 40pc cap on the other countries' quotas for hot-dip galvanised (HDG) and plate in its statement of final determination published today. It proposes that the caps come into effect on 1 October to enable material already on the water to clear and avoid supply restrictions. "This would address the concern about crowding out, whilst maintaining a similar volume of imports to come from existing supply countries," the TRA said. The other countries' quota for HDG is 88,075t for July-September, meaning anyone selling into it — the quota is dominated by Vietnam and South Korea — has access to 35,230t before duties become payable. The TRA said there should be no cap on organic coated material, despite requests to the contrary from UK Steel. Going forward, Turkey will not be in scope of the safeguard on HDG as its share during the investigation period was just 0.1pc. The TRA said unused quota should no longer be rolled forward to the next quota, and that countries with their own individual quota should have no access to the residual other countries' quota in the final quarter of the quota year, April-June. These two changes are largely in line with those made by the EU in its recent safeguard review. Vietnam will also come into the residual quota for hot-rolled coil, which is 24,295t/quarter, as its volumes have exceeded the 3pc limit specified by the WTO for developing economy status, reaching 4.3pc in the TRA's investigation period. Vietnam had been a favoured origin for traders and buyers, given its previous exemption from the measures. Egypt remains exempt and will likely be subject to increased interest going forward. Some large buyers have been visiting the country in recent months to establish supply lines. The TRA's recommendation "falls short of what is required, given the scale of the challenge the UK industry is faced with", UK Steel said. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US budget bill would prolong 45Z, boost crops

13/05/25

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13/05/25

US budget bill would prolong 45Z, boost crops

New York, 13 May (Argus) — A proposal from House Republican tax-writers would extend for four additional years a new tax credit for low-carbon fuels and adjust the incentive to be more lenient to crops used for biofuels. Republicans on the House Ways and Means Committee on Monday introduced their draft portion of a far-reaching budget bill, which included various changes to Inflation Reduction Act clean energy subsidies. But the "45Z" Clean Fuel Production Credit, which requires fuels to meet an initial carbon intensity threshold and then ups the subsidy as emissions fall, would be the only incentive from the 2022 climate law to last even longer than Democrats planned under the current draft. The proposal represents an early signal of Republicans' plans for major legislation through the Senate's reconciliation process, which allows budget-related bills to pass with a simple majority vote. 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Mexico industrial production contracts in March

13/05/25

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13/05/25

Mexico industrial production contracts in March

Mexico City, 13 May (Argus) — Mexico's industrial production contracted by 0.9pc in March from the previous month, as declines in mining and manufacturing were only partly offset by continued growth in construction. The drop was not enough to undo the 2.2pc increase in February — the sharpest monthly expansion in four years — as manufacturers ramped up output ahead of incoming US tariffs. The March industrial production index (IMAI), published by statistics agency Inegi, was higher than Mexican bank Banorte's forecast of a 1.4pc decline. Banorte noted signs of volatility affecting manufacturing and other sectors because of a complex trade outlook. Manufacturing contracted 1.1pc in March after expanding 2.9pc in February. The impact varied across subsectors, with metal goods down 5.5pc and transportation, including auto production, down 1.1pc. Volatility may ease in the coming months as US tariff policies become clearer and Mexican officials push to preserve the country's trade edge under US-Mexico-Canada (USMCA) free trade agreement rules, Banorte said. Construction expanded 0.8pc in March, following increases of 3.4pc in February and 0.5pc in January, driven by higher public investment tied to President Claudia Sheinbaum's economic plan, "Plan Mexico." Analysts see the plan as a catalyst for continued growth in construction this year, with measures including greater domestic content in public purchases, public-private participation in infrastructure projects and a target of $100bn in private infrastructure investment for 2025. These effects could be amplified by aggressive interest rate cuts from the central bank. Mining contracted by 2.7pc in March, returning to negative territory after a slight 0.1pc uptick in February. Oil and gas output also contracted 2.7pc after rising 1.0pc the month before, while non-oil mining contracted 4.3pc in March after a 0.6pc increase in February. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US inflation eases to 2.3pc in April

13/05/25

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13/05/25

US inflation eases to 2.3pc in April

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ISTA blasts 'ludicrous' Tata Steel UK assertion to TRA

13/05/25

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13/05/25

ISTA blasts 'ludicrous' Tata Steel UK assertion to TRA

London, 13 May (Argus) — Tata Steel UK's claim to the Trade Remedies Authority (TRA) that 2m-wide hot-rolled coil (HRC) could be bought for slitting is "ludicrous", according to the International Steel Trade Association (ISTA). In a submission to the TRA as part of its safeguard review, Tata said that if 2m-wide material, which it does not produce, is removed from the safeguard, it would be bought and slit, meaning it is no different from the material produced by Tata . But ISTA said 2m-wide HRC is a "significant part" of the yellow goods market and is used by companies such as JCB, Caterpillar and Liebherr for earth-moving, construction and agricultural equipment. It is also used in pipe and tube production and does not constitute a small proportion of the overall market, as suggested by Tata, ISTA said. The material must be imported as it is not manufactured in the UK and carries a premium over speed-stock widths produced by Tata. "For Tata Steel, who import volumes of this width themselves, to suggest that wider coil is ‘often imported only to be slit to narrower cuts' is ludicrous," ISTA said, arguing that there are "almost no" slitting lines in the UK that are capable of slitting 2m-wide material. The lines that do exist typically slit hot-dip galvanised (HDG) rather than HRC, Argus understands. Importers have also questioned the economic rationale of Tata's assertion that if higher-yield HDG is removed from the safeguard, importers would buy it and use it to compete with more commoditised grades produced by Tata. Higher-yield material carries a premium, and it would make no economic sense to pay it and then compete in the commodity market, trading firms told Argus . The TRA, which is expected to announce its provisional findings this week, is widely anticipated to propose caps on the quota for other countries' HDG. Importers told Argus that they were surprised by the aggressive tone of Tata's rebuttal to claims fielded by importers about material that it does not produce being excluded from the safeguard. By Colin Richardson Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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