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OJO  \ o-ho \
An Eye on Mexico
Audaxia Newsletter
April 2022

Editorial

Kenton SchaeferFor Audaxia Logística

Welcome to OJO. This month’s issue takes us to a part of Mexico which is dear to us, the Pacific. It is with that emphasis that we highlight colonial era explorations in Mexican history, and showcase a Mexico City experience which incredibly takes its history back to that very same period. Our steel art features this month are also connected to the Pacific, as both can be found in Los Angeles. One of Jeff Koons’ three Rabbits and Frank Gehry’s Walt Disney Concert Hall are less than 200 feet apart from each other in the Southern California city. Furthermore, the worlds of politics and diplomacy have also seen much activity in Mexico. In political news, the loudest reactions come from the rejection of the Mexican President’s efforts to push the country’s energy sector towards a more nationalized position. If successfull, it would give greater control of those markets to the state. His relentless efforts to lift-up Pemex (Petróleos Mexicanos) and the CFE (Comisión Federal de Electricidad), at the expense of fair competition and a broader marketplace, would have deep socio-economic consequences for Mexico. It is largely understood that for many Mexicans, their national identity stems in great part from the country’s energy sector. Ever since President Lázaro Cárdenas nationalized the industry in 1938, it’s given Mexico a sense of independence, strength, and pride. But with so much of the world rightly looking towards the future, especially in terms of energy, it is with a sense of relief that we see Mexico’s Congress act so wisely. This bold deflection will help restore faith for international investment, allow the industry to continue the advancement of greener energy alternatives, and show the world that Mexico does honor its commitments. In diplomatic news, Mexico has searched for faraway markets with which to trade, namely in the Middle East, by sending envoys to the region to establish trade accords. Mexican Foreign Minister Marcelo Ebrard has recently returned from Saudi Arabia, Qatar, and the UAE in such pursuits. In manufacturing news, we present several news reports which argue the benefits of nearshoring and Mexico’s geographic advantages for American markets. Brought on by the current shipping reality, further challenges to supply-chain and manufacturing industries place Mexico as a solid solution to those challenges. Shanghai’s lockdown, the war, ocean freight rates, presidents, governments, as always there is much to review - and we’re here to review it with you. As Mexican Chief Negotiator for the USMCA said about working with a company to help navigate Mexico, “It’s important to work with someone on the ground in Mexico that understands the rules at the federal and domestic level...to help coordinate all of the logistics, legal and regulatory considerations so that they can reduce costs without having to worry about learning how Mexico works.”. Bienvenidos a OJO.

Kenton Schaefer
Schaefer Stevedoring
For Audaxia Logística
A Schaefer Americas company

Email me directly.

This Month's Highlights

Mexican President’s Contentious Electricity Overhaul Defeated in Congress

Mexican President Andres Manuel Lopez Obrador’s plan to increase state control of power generation was defeated in parliament on Sunday, as opposition parties united in the face of a bill they said would hurt investment and breach international obligations.
 
Steel Expansion to Benefit Port of Brownsville; Ternium Investing in Mexico Plant

A $1 Billion USD expansion of a steel plant in northern Mexico by the Port of Brownsville’s biggest steel customer can only mean good things for the port. That’s according to Port Director and CEO Eduardo Campirano, who said the port is expected to through-put 3.6 million metric tons of steel slab from Brazil to the Ternium S.A. plant in Pesqueria, Mexico, near Monterrey.
 
Mexico Increasingly Attractive for US Shippers & Manufacturers

Kenneth Ramos, former Mexican chief negotiator for the USMCA, highlights the nation’s economic and trade advantages. Growth in Mexico has caught the attention of many US manufacturers and shippers looking to nearshore or take advantage of Mexico’s improving transportation networks with a young and educated workforce. “It’s important to work with someone on the ground in Mexico that understands the rules at the federal and domestic level ... to help coordinate all of the logistics, legal and regulatory considerations so that they can reduce costs without having to worry about learning how Mexico works,” Ramos said.
 
Why Mexico Could be the Big Winner in Pandemic Shift to Nearshoring

Major brands and retailers across the U.S. and Europe are looking to bring manufacturing closer to home amid the ongoing global supply chain crisis, with Mexico in pole position to gain from a pivot in strategy. US toymaker Mattel has become the latest company to switch tack after it announced mid-March that it had invested $50 million to expand its plant in Monterrey.
 
DeAcero to Invest Over $20 Million USD in New Ramos Arizpe Plant

The new plant is expected to produce around 180,000 MT of hot-rolled and galvanized profiles in its first phase of operations in 2023 with an estimated 450 permanent jobs for the state of Coahuila.
 
Ahmsa Renews Certification for Steckler Rolling Mill

Mexican integrated steelmaker Ahmsa said this week that it has renewed the ISO 9001:2015 certification for its Steckler rolling mill.
 
Mexican Economy Seen Growing 3.4% in 2022, Says Finance Ministry

Mexico’s government forecast economic growth of 3.4% for 2022, far below what the nation’s President was aiming for, a finance ministry document showed on Friday, as Latin America’s second-largest economy claws back losses from the COVID-19 pandemic.
 
Mexico’s Factories Contract for 25th Straight Month as Inflation Rises

Mexico’s manufacturing sector contracted for the 25th month in a row in March, amid rising inflation, global shortages of materials, and economic uncertainty due to the pandemic and the war in Ukraine, a survey showed.
 
Mexico Exports 405,011 MT of Steel Products to US in February

According to the US Census Bureau, Mexico exported $510 Million USD of steel products, or around 405,011 Metric Tons to the United States for the month of February.
 
Mexico Sends Delegation to Strengthen Economic Ties with Saudi Arabia & Other Middle Eastern Nations

Mexican Foreign Minister Marcelo Ebrard and his Saudi Arabian counterpart on Wednesday agreed to strengthen bilateral economic relations on the first day of the diplomat’s 10-day tour of the Middle East and India, Mexico’s government said.
 
Mexico City Architect Awarded $500 Million USD Project from The Metropolitan Museum

Mexico City based architect Frida Escobedo will design the new $500 Million USD wing at the Met. Following a comprehensive international search, The Metropolitan Museum of Art announced that Mexico City based architect Frida Escobedo has been selected to realize the museum’s vision for the Oscar L. Tang and H.M. Agnes Hsu-Tang Wing.
 
Fashion in Steel Exhibit Hopes to Dispel Myths About Medieval Armor

The “Iron Men – Fashion in Steel” exhibit, which runs through June 26 at the Kunsthistorisches Museum in Vienna, Austria, features 170 artifacts that throw a new light on this complex subject, along with selected paintings, textiles and sculptures.
 

Analytics

US Imports for Consumption of Monitored Steel
  January '22/YTD January '21/YTD
Country Quantity in MT* Variation*
Canada 376,201 -9.55%
Mexico 305,955 +61.26%
Brazil 228,169 +11.26%

Source: U.S. Census Bureau 
* Metric tons

HRC Spot Price Mexico
Price * % Monthly % YTD
$ 1,516 ** -1.62% 5.64%


Source: Reporte Acero
* As of April 6th 2022
** U.S. dollars per metric ton

Exchange Rate: Mexican Peso
30 Day Average & Volatility
 
Currency 30 Day
Average
30 Day
Volatility
🇺🇸 1 USD 20.21 MXN 0.42%
🇪🇺 1 EUR 22.21 MXN 0.42%
🇨🇳 1 CNY 3.17 MXN 0.41%
🇯🇵 1 JPY 0.16 MXN 0.65%
🇬🇧 1 GBP 26.50 MXN 0.37%

Culture


Rabbit, Jeff Koons
As a continuation of our Pacific Coast emphasis, this months highlight is a special work of art which is part of the permanent collection of The Broad Museum in Los Angeles. Jeff Koons’ Rabbit is a series of three identical, stainless steel sculptures made by the artist in 1986. Today, one can be found in the Museum of Contemporary Art in Chicago, a second is in the hands
of a group of art collectors called GPS Partners, and the third in California. Jeff Koons is an American artists living and working in New York City who is most famous for mirror-finished and polished stainless steel works of balloon animals in a variety of sizes. In May 2019, one of the three sculptures was auctioned for $91.1 million, breaking the auction record for an artwork by a living artist.

 

Steel in the World


The Walt Disney Concert Hall, Los Angeles
The Frank Gehry designed concert hall is one of the most iconic buildings in the Los Angeles area, possibly even the world. It’s home to the world-renown LA Philharmonic headed by revered conductor Gustavo Dudamel, and is considered one of the most acoustically sophisticated concert halls on the planet. Completed in 2003, and with more than 6,000 matte-finished, stainless steel panels creating a curving metallic skin, the building resembles a gleaming Clipper ship with its silver sails filled with wind. Further intensified with acoustics designed by Minoru Nagata, the concert hall is both visually and aurally magnificent. This musical treasure was made possible through an initial gift by Lilian Disney, Walt Disney’s widow. As the project expanded, further contributions by the Disney family and Walt Disney Company were also used to make this cultural wonder a reality.
 

After You


Hacienda de los Morales, Mexico City
Mexico has seemingly endless options when it comes to beautiful and interesting places to dine, and this restaurant must be considered one of them. This Mexico City jewel is one of the most unique dining experiences in the country. Hacienda de los Morales can date its history back an incredible 470 years making it one of the most deeply-routed establishments in Mexico. Shortly after the Spanish arrival to Tenochitlán (Mexico City) in 1521, the area on which the restaurant now stands became a Mulberry tree plantation. These trees, called “Morales” in Spanish, were used to attract silk works for textile production, and the area eventually became known as “Los Morales”. In 1647, almost 100 years after the areas agricultural founding, construction began on the first structure which was then called “Hacienda de los Morales”. Our international clients especially love experiencing this unique part of Mexican history and cuisine. The food is excellent, and the ambiance is unparalleled. There have been many renovations, modifications, and additions to the structure that dates back to colonial Mexico, but you can still feel the antiquity when walking the grounds. It’s an extremely special experience to spend time in such a place. Can you remember the last time you had a meal where the grounds directly took you back over 400 years?
 

This Month in Mexican History


Mexico’s Pacific Coast & Its Colonial Exploration, April 1535
This Month in Mexican History brings us to the Pacific coast. It was in 1535 that Hernán Cortés set sail from Acapulco with three ships with the intention of exploring the western coastline for his glory, and for Spain’s. Cortés had recently returned to Mexico from Spain, after having to regain the favor of the Spanish Crown, only to find that fellow Spaniard Nuño de Guzman had already made significant headway north along the Pacific ocean (then known as the Southern Sea). Also sailing from Acapulco, Guzman made his way north up to the Rio Grande in the state of Nayarít before having to return. Cortés therefore, needed to make it even further north to surpass the accomplishments of one of his fiercest competitors in both fame and fortune. The early 1530’s seemed to be a race to glory and discovery by Europeans, and in Mexico it was mostly amongst the Spaniards. These Pacific coast expeditions would eventually lead to the discovery of California which would first belong to Spain, and then Mexico, before ultimately becoming the 31st state of the United States in 1850. And while the discovery of what would become the US State of California can be attributed to Portuguese Captain Juan Rodríguez Cabrillo in 1542, it was Spanish Captain Hernan Cortés that organized the first expeditions northward creating the initial steps towards that discovery. He himself would make it as far as La Paz in Baja California in 1535. This Pacific coast expedition would be the last major Mexican adventure of his life. He returned to Spain several years later where he died in 1547 at the age of 62.
 
Audaxia Logística

OJO is a monthly newsletter combining top steel and shipping news impacting Mexico with relevant cultural interests. Created for the international community, OJO means to further enrich the businesspersons’ commercial experiences with the Latin-American nation.
 
 
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