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OJO  \ o-ho \
An Eye on Mexico
Audaxia Newsletter
October 2021

Editorial

Kenton SchaeferFor Audaxia Logística
Welcome to OJO. Now that our newsletter is well underway, we’re excited to continue sharing important news events related to steel and shipping in Mexico while highlighting interesting cultural aspects pertaining to either.

This month we’ve continued to experience the ever persistent supply chain demands across most commodity types and shipping modes around the world. And Mexico is not any different. There continues to be very high traffic at the country’s most important ports, with the Pacific experiencing a greater degree of congestion than the Gulf. The situation has generally improved when compared to the surreal times from around the middle of the year, but we understand that relief may be shortlived considering the coming holiday season. We will of course continue to report on the matter as we experience it first hand with our own shipments along both coasts, as well as with the news we curate from the multiple national and international news platforms.

I have to admit that when we began to develop the concept behind OJO, I was extremely pleased that our team agreed to introduce both cultural and artistic elements to this project. My greatest inspiration behind wanting to present such creative aspects was my fascination with California artist Richard Serra. His world-renowned work with steel is among the most beautiful artistic endeavors I can remember seeing. When I first saw some of his pieces at the Guggenheim in Bilbao, Spain, and then for a second time at the Gagosian gallery in New York City, I knew I wanted to combine my personal work in steel and shipping with a more creative and unique expression. I firmly believe that anyone who’s pursuing a career in this industry must explore this body of work. To see steel as art in multi-ton, solid pieces is extraordinary, and the experience can’t help but enrich both your personal and professional lives. So with that said, I hope you’ll enjoy our brief profile on the man. Bienvenidos a OJO.

 
Kenton Schaefer
Schaefer Stevedoring
Business Development 
& Marketing


For Audaxia Logística
A Schaefer Americas company

Please send us any thoughts, comments, or suggestions here.

This Month’s Highlights

Mexico
 
Below you’ll find a collection of news related materials such as; articles, op-eds, videos and podcasts which are related to all things Mexico, steel and logistics.
 
Podcast “La Vespertina”: Energy Reform in Mexico

A new energy reform initiative is headed for congressional debate in Mexico. Launched by President Andres Manuel Lopez Obrador (AMLO), this reform will place the state in charge of the energy and power markets. This podcast (in Spanish) analyzes the implications and motivations behind this major bill.
 
USMCA Underpins Foreign Direct Investment for the Steel Industry

Mexico captured 2.1 billion dollars of foreign investment for the expansion of two existing steel plants. First, ArcelorMittal in Lazaro Cardenas which will finish a new plant adding over 5 million tons per year of capacity for flat, long and semi-finished products, with upwards of 2.5 million tons per year dedicated to HRC. And second, Ternium in Pesqueria will also add a new line for an additional 4.4 million tons per year of capacity with an undisclosed amount dedicated to HRC production. Both will address the rising base-material needs of the country for the general industrial markets, rather than for the automotive sectors.
 
Gerdau Corsa Will Import Scrap

Gerdau Corsa, has secured 60 million dollars of credit at 90 days with BBVA, which has pledged to be carbon emissions neutral by 2050. This amount is part of BBVA’s larger 200 million euro capital used for their global sustainability goals. Gerdau Corsa’s business model involves the recycling of ferrous scrap for steel production which removes a significant amount of CO2 emissions and eliminates the consumption of iron ore, pig iron, and carbon for the production of steel. These environmental considerations and funding practices are in part what make BBVA one of the leading sustainability focused banks in the world. Gerdau is a Brazilian based steelmaker and scrap processor with operations in over 10 countries, including Mexico.
 
Video: Moving Better Through the Border, Together

The US-Mexico border, is in many ways, its very own country with its own bi-cultural idiosyncrasies. Cross-border logistics therefore, needs to understand both US and Mexican regulatory requirements to effectively deal with lead-time issues, cost sensibilities and customs challenges brought on by Covid-19. In this video, Automotive Logistics editor-in-chief Christopher Ludwig speaks with Agustin Sustaita, managing director of Transportes Logisticos Especializados (TLE), to learn more on improving international and cross-border logistics.
 
International
 
This section offers information from a global perspective on matters related to shipping and logistics which may impact supply chain realities abroad, as well as in Mexico.
 
Port Leaders Warn of Supply Chain Challenges as Holidays Near

As we mentioned in our first newsletter, seaport directors and other official personnel continue to forecast trouble and an even deepening of the supply chain crisis. An executive director of the Port of Long Beach, California, suggests that consumers “better shop early and don’t wait until the last minute”.
 
Accelerating Inflation Spreads Through the Economy

The U.S. Labor Department released troubling figures on inflation and consumer pricing last month, indicating that the consumer-price index rose to 5.4% year-to-year. Among the many factors behind this increase are the endlessly discussed pandemic-related labor and materials shortages. There can be no doubt that supply-chain and inventory challenges throughout the pandemic are having a negative impact on inflation, which has remained at its highest rate in over a decade.
Global Port Trackers Show Where the Worst Ship Logjams Lurk

We all know the global supply chain industry is facing challenges amidst pandemic restrictions and port congestion, but how can we quantify this? RBC Capital Markets has come up with a custom metric “to gauge whether global ports are increasing or decreasing container discharge times and clearing congestion”. Known as “the time of turnaround”, this metric allows us to compare average ship-discharge times before and after Covid-19 so we can get a clearer picture of the challenge.
The Workers Who Keep Global Supply Chains Moving are Warning of a 'System Collapse'

A sometimes overlooked component of the current supply-chain reality is the workers which are the undeniable glue holding it all together. And that glue is reaching its melting point with operators being pushed to their limits on both land and sea. Organizations such as the International Chamber of Shipping (ICS) signed an open letter to heads of state attending the UN General Assembly to raise awareness about the tough conditions that seafarers, truck drivers and airline workers face since Covid-19 hit. Between quarantines and travel restrictions, “there are people who have been stuck at sea for over a year”, a chief officer told CNN Business.

Analytics

The information below summarizes steel import figures into the United States, includes an HRC spot price index average for Mexico, and lists currency exchange rate figures.
 
US Imports for Consumption of Monitored Steel
  July '21/YTD July '20/YTD
Country Quantity in MT* Variation*
Canada 3,433,148 +41.33%
Mexico 1,864,559 +24.46%
Brazil 2,636,308 -21.18%

Source: U.S. Census Bureau 
* Metric tons

HRC Spot Price Mexico
Price per MT * % Monthly % YTD
1,899 ** -0.05% 88.96%


Source: Reporte Acero
* As of October 13th 2021
** U.S. dollars per metric ton

Exchange Rate
30 Day Average
🇺🇸  1 USD = 20.27 MXN
🇪🇺  1 EUR = 23.67 MXN
🇨🇳  1 CNY = 3.14 MXN
🇯🇵  1 JPY = 0.18 MXN
🇬🇧  1 GBP = 27.70 MXN

Culture

This section is of particular interest to all of us at Audaxia. It is where we have the opportunity to present the international business community with some of the country’s dearest treasures. Mexican culture has always been alive, vibrant and spirited, and we wish to show that intensity here. The powerful works of Frida Khalo, the culinary magic of Oaxaca, the nation’s architectural uniqueness, music, film, and much more.
 

Steel as Art

“Weight is a value for me - not that it is any more compelling than lightness, but I simply know more about weight than about lightness and therefore I have more to say about it, more to say about the balancing of weight, the diminishing of weight, the addition and subtraction of weight, the concentration of weight, the rigging of weight, the propping of weight, the disorientation of weight, the disequilibrium of weight, the rotation of weight, the movement of weight, the directionality of weight, the shape of weight.”
 
- Richard Serra
 
Richard Serra's work weighs tons and is meant for the public to interact with the spaces it creates.
Richard Serra is an American artist living in New York City. A native Californian (born 1938 San Francisco, California), he lived on the west coast up until college, where he studied English Literature at the University of California Berkley, Santa Barbara. From there he traveled, worked, and studied throughout Europe and eventually settled in New York where he began his sculpting works. Having been the son of a steel worker, as well as been one himself during college, he had a unique exposure to the material which clearly was a great influence in what was to become his signature style.
Richard Serra's "The Matter of Time" in Guggenheim Musem in Bilbao, Spain
He is widely known for his large steel works which are not welded together, but stand alone only balanced by their weight and gravity. They are truly a spectacular product of creativity with an otherwise commercial commodity. His large-scale pieces are known to be site-specific. Which is to say, they are made for the area in which they are to be placed, creating a unique reality to the space. His other works not shown here are massive and spectacular spherical shapes; arcs, and spirals which create a surreal sense of dimension when experienced. Whether indoors or out, they place the viewer in a modified proportion with the piece, and the surrounding area. His work is truly unique, and like none-other. The pieces shown here where at the Gagosian Gallery in New York City, but his work can be found globally.

Monument to the Revolution: Doomed, then Restored

For over two decades, the unfinished steel carcass of the Monument to the Revolution was left vulnerable and exposed until Mexican architect Carlos Obregón Santacilla came to its rescue. / Photography by Guillermo Khalo
As one of Mexico’s most iconic buildings, its history as one of the tallest triumphal arches in the world goes back to the beginning of the 19th century when Porfirio Díaz ruled the nation for over three decades. Diaz’s devotion to French architecture is well known and most visible in some of Mexico City’s most beautiful neighborhoods like Roma and Condesa. And at the dawn of his long-lasting rule, in 1904, Diaz wanted to make a grand architectural gesture to celebrate the 100th anniversary of Mexico's Independence in 1910. So he called for an international competition to design what was meant to be the Mexican equivalent of the US Capitol Building: a most important structure for deputies and senators aimed to be one of the largest and most spectacular Legislative Palaces in the world.

Émile Bénard, a renowned French painter and architect, won the competition to design the Palacio Legislativo Federal (Federal Legislative Palace).
Sketch of the Federal Legislative Palace by French architect Émile Bénard, which was never built.
The construction of Bénard's design started in 1906: a grand building inspired by neoclassical European aesthetics began to rise, with massive steel beams and cutting-edge technology used for its foundation.

But then, in 1910, the Mexican Revolution erupted creating a decade long (1910-1920) armed uprising called to action by Francisco I. Madero to end Porfirio Diaz’s government and establish free and democratic elections. By 1912, amid the violent conflict, the construction of the Federal Legislative Palace was suspended and the site was left unfinished and abandoned with its massive steel structures eerily exposed for over two decades.


It wasn’t until 1933 that the Mexican architect Carlos Obregón Santacilla came to its rescue. His approach was to reinterpret the abandoned structure as a glorious monument which commemorated the Mexican Revolution. The modified design also added a magnificent square to its stately presence which is enjoyed by hundreds of locals and tourists from around the world on a daily basis.

The monument which had once been a doomed and failed architectural dream was eventually fully restored to glory by 1936 as one of the most important and grandiose mausoleums in Mexico. At the base of its four pillars lies the remains of some of Mexico’s most historical figures: Venustiano Carranza, Francisco I. Madero, Plutarco Elías Calles, Francisco “Pancho” Villa and Lázaro Cárdenas all lie in the Monumento a la Revolución.
Audaxia Logística
 
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