Mexico Metals Report Q2 2013

Unlike developed market peers, Mexico's steel industry will be boosted in the coming years by strongdomestic economic growth. Moreover, we expect steel-intensive growth in the form of robust autosproduction and further infrastructure spending. In a global steel market racked by overcapacity and lowoutput prices, this will mark Mexican steel producers out as outperformers. However, as we expect steelprices to remain relatively subdued, production growth will lag consumption growth. We forecast annualsteel production and consumption growth to average 5.5% and 6.2% over 2013-2017, respectively.