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ArcelorMittal, the world’s second-largest steelmaker, has recently announced the renewal of a strategic contract with Mexico’s state power utility, Comisión Federal de Electricidad (CFE), securing a decade-long natural gas supply deal valued at $2.7 billion.
In an official statement, ArcelorMittal, self-identified as the largest natural gas consumer in Mexico, outlined that this significant contract will play a pivotal role in sustaining the operations at its Lazaro Cardenas facility situated in the state of Michoacan.
The natural gas supply will originate from Waha, Texas, reinforcing the company’s commitment to operational excellence. Lazaro Cardenas serves as a key hub for ArcelorMittal’s production, where the steel giant manufactures an array of products including steel rods, slabs, bar stock, and wire. Additionally, the facility boasts a port concession, facilitating efficient import and export activities for the company’s goods.
Notably, ArcelorMittal’s steadfast position in the market is underscored by its shipment of 2.5 million metric tons of steel out of its North America segment during the third quarter.
This latest natural gas supply agreement is expected to further fortify the company’s capabilities and contribute to its sustained growth.
The development in the steel industry comes amidst discussions on Mexico’s energy landscape. Ternium’s CEO emphasized the need for increased energy investments in Mexico to address bottlenecks affecting private industry.
The energy market in Mexico has witnessed a shift, with state-run firms dominating since President Andres Manuel Lopez Obrador, a proponent of resource nationalism, implemented measures rolling back the sector’s previous openness to private capital. This renewed contract not only secures a vital resource for ArcelorMittal but also highlights the complex interplay of energy policies and industry dynamics in Mexico.
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