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Steel and cement companies ‘turn off’ furnaces due to lack of gas

The shortage of natural gas in Nuevo León, Tamaulipas, Chihuahua, Querétaro, Coahuila and Sonora, added to the electrical blackouts, affected steel, cement and concrete plants that concentrate 24 percent of industrial energy consumption in Mexico, show data from the Secretary of Energy.

A source close to the steelmakers confirmed that iron and steel producers located in Coahuila, Nuevo León and Tamaulipas –Where firms such as AHMSA, Ternium, DeAcero and Tubacero– They completely stopped their activities from February 13.

He explained that, in the case of steel companies, some operated to a minimum only to maintain equipment, while firms such as AHMSA, already partially reactivated some plants when CFE stabilized the electricity service, however, the lack of natural gas prevented industrialists from resuming 100 percent activities.

“This depends entirely on Texas, until they resume the export (of natural gas) we will not know when we can restart the sector,” said the source.

In the case of cement and concrete plants, the impact was recorded in Nuevo León, Chihuahua, Coahuila and Sonora –Where plants operate Grupo Cementos Chihuahua, Cemex, Holcim and Cruz Azul– where about 500 plants had to turn off their furnaces or carry out technical stoppages, sources from the sector reported inside the National Cement Chamber (Canacem).

“The impact is very varied, some (cement companies) temporarily stopped, others continue to stop and most likely others will stop,” the source told El Financiero.

In total, Canacem represents more than 35 plants installed in the country, of which almost a third are located in northern states, and others more in San Luis Potosí, Querétaro, Aguascalientes, Hidalgo, Veracruz and the State of Mexico, also affected by the electrical blackout.

Cementos Chihuahua Group (GCC) detailed that the lack of electricity and natural gas affected production in three of its plants in Chihuahua, Samalayuca and Juárez. Although at the moment they have not measured the real impact on cement volumes or their prices, they do analyze the possibility of carrying out a technical stoppage.

We cannot light the cement kilns for lack of gas, the cement mill until Thursday at 11:00 hours we were released from CFE to start at full load, so we cannot determine to date the impact of the shortage, it will take time “, answered GCC.

The concrete industry, which relies on cement production, was affected by the lack of electricity in at least some 480 plants that are part of the Mexican Association of the Ready-mix Concrete Industry (AMIC), in the region Center-Bajío and north.

Ana Laura Burciaga, national president of AMIC – an organization that is also part of Canacem – explained that, as a result of the blackouts and gas shortages, several cement companies adjusted production at their plants, which reduced up to 50 percent cement supply to the concrete plants.

“The plants that are affected are from the center to the entire north, we have about 800 plants installed in the territory that deliver more than 75 percent of the ready-mix concrete in the country, I believe that 60 percent of those 800 plants are affected. “, He said.

Although the concrete plants do not require natural gas for their operation, they do depend on the activity of the cement companies, therefore, if the situation is not regularized in the coming days, companies such as Cemex, Moctezuma and Cruz Azul they would lose up to a third of their daily production.

“They are supplying us in many cases with only 50 percent of our daily cement requirement. Surely in this week that has been of impact we will have to be losing 30 percent of production at least daily ”, he asserted.

For steel companies, energy accounts for around 20 percent of the total cost of their operations, however, other sectors also have a strong dependence on gas and electricity.

In the case of cement companies, electricity and gas represent 23 and 7 percent, respectively, of their operating costs.

At automotive section54.2 percent of their energy consumption is electricity and 35.9 percent gas, so without these inputs they cannot operate.

It should be noted that, last week Volkswagen, Mazda, General Motors, KIA, Audi, Honda, Ford, Nissan, BMW, Toyota and the largest glass manufacturer, Vitro, temporarily suspended operations at some of their plants in Mexico.

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