Sinosteel Stainless Steel Pipe Technology Co., Ltd.

1. Overview of Brazil

The Federative Republic of Brazil (Portuguese: República Federativa do Brasil) is the largest country in Latin America. The capital is Brasilia. Portuguese is the official language. The total land area is 8.5104 million square kilometers and the population is 203 million.

Brazil ranks first in Latin America and tenth in the world (2024). With developed agriculture and animal husbandry, it is the main producer and exporter of a variety of agricultural products. The output value of the service industry accounts for nearly 60% of the GDP, and the financial industry is relatively developed. Brazil has a relatively complete industrial system and a strong industrial foundation. The industries such as steel, automobiles, shipbuilding, petroleum, chemicals, electricity, and shoemaking are relatively developed, and the civil regional aircraft manufacturing and biofuel industries are at the world\'s leading level. The GDP in 2024 will reach 11.7 trillion reais (about 2 trillion US dollars).

Brazil\'s 29 mineral reserves include niobium, manganese, titanium, bauxite, lead, tin, iron, and uranium. Niobium ore reserves have been proven to be 4.559 million tons, and the output accounts for more than 90% of the world\'s total output. It has proven iron ore reserves of 33.3 billion tons, accounting for 9.8% of the world, ranking fifth in the world and second in the world in production. The proven oil reserves are 15.3 billion barrels, ranking 15th in the world and second in South America (second only to Venezuela). Since the end of 2007, multiple extra-large subsalt oil and gas fields have been discovered along the coast, with expected reserves of 50 billion to 150 billion barrels, and are expected to enter the top ten oil storage countries in the world.

2. Overview of Brazilian steel

Brazil is the ninth largest steel producer in the world and the largest steel producer in Latin America. It occupies an important position in the global steel industry. It has proven iron ore reserves of 33.3 billion tons, accounting for 9.8% of the world, ranking fifth in the world and second in the world in production. The crude steel output will be 34.1 million tons in 2022, the crude steel output will be 31.8 million tons in 2023, and the crude steel output will be 33.8 million tons in 2024.

    Voltaretonda is an important steel industrial city in the state of Rio de Janeiro, Brazil, located at the bend of the South Paraiba River. The city developed rapidly due to the establishment of a state-owned steel plant in 1941, and has been expanded many times to become the largest steel production base in Latin America. Its industrial development benefited from its geographical advantages in its proximity to mineral resources and the two major consumer markets, forming a steel industry cluster with Brazilian Iron and Steel Corporation (CSN) as its core. Achieve annual crude steel production capacity of more than 6 million tons and rolled product production capacity of 6 million tons. It adopts multi-furnace continuous ingot technology, and its products cover slabs, hot-rolled coils, cold-rolled sheets, etc., and are used in the fields of automobile manufacturing and construction engineering. It has iron ore self-mining capacity and port transportation system to form a complete mining-smelting-processing-logistics industry chain.

     Brazil\'s annual steel imports are more than 5 million tons and its annual exports are about 11 million tons. Brazil\'s domestic steel sales are about 20 million tons. The United States has always been the main destination for Brazil\'s pig iron and steel exports, accounting for about 40% of the exports to the United States. China is currently Brazil\'s largest steel importer. In the first quarter of 2025, Brazil imported 1.096 million tons of steel products from China, and the steel products imported from China are expected to exceed 3 million tons of annually.

Brazil\'s per capita steel consumption has stagnated in recent years and is at a low level of international standards, with 110 kg in 2024. In 2024, the global per capita consumption of finished steel is 214.7 kg.

3. Market size and demand of Brazilian steel

The size of Brazil\'s steel market will reach US$16.56 billion in 2024. CAGR predicts that the annual growth rate will be around 4% from 2025 to 2033, and the market is expected to reach US$24.85 billion by 2033. During the period 2025-2033. High domestic demand in important industries such as infrastructure, automobiles and construction is one of the market drivers that drive expansion. In addition, substantial investment in green steel manufacturing and technology is promoting greener practices, which helps actively expand Brazil\'s steel market share.

    One of the main factors driving Brazil’s steel market is the rapid growth of the country’s construction and infrastructure sectors. With the acceleration of urbanization, steel is widely used in the construction of residential, commercial and industrial buildings. In addition, the construction of roads, bridges and public transportation systems has also strengthened this need. Brazil\'s steel industry is expected to be the main engine of economic growth in the country as the government attaches great importance to large infrastructure projects. This trend supports the growing demand for steel products such as steel bars, steel plates and structural steel, making Brazil one of the largest steel markets in Latin America. For example, in March 2025, ArcelorMittal acquired the remaining 60% stake in Brazilian pipeline manufacturer Tuper and acquired full ownership. Tuper produces welded steel pipes, structural steel and galvanized steel with an annual production capacity of 826,000 tons. The acquisition strengthens ArcelorMittal\'s position in the Brazilian steel industry.

4. Major steel enterprises in Brazil

(1) Gerdau SA

Gerdau SA is Brazil\'s main long material manufacturer, ranking 12th in the world. The group has five major business departments, including: North America (including the United States and Canada), Brazilian Long Materials Branch, Brazilian Acominas Ouro Branco Branch, and Special Steel Branch (including Brazil and Spain).

In addition to establishing factories in Brazil such as Recife, Saint José-Campus, Saint José dos Campos, Rio Grande, etc., the Brazilian Gaeldao Group also set up factories in many South American countries such as Chile, Bolivia, Argentina, Uruguay, and Colombia.

Galdot Group controls 30% of Brazil\'s steel production capacity. The company mainly uses scrap and pig iron during the electric furnace production process to produce ordinary long steel, special steel and flat steel. Most of these scrap and pig iron are purchased from each factory\'s operating area (equivalent to small rolling mills) and also produce steel from iron ore (through blast furnaces and direct reduction). These products are mainly used in civil construction, industrial, automotive and agricultural sectors.

Website: //www.gerdau.com.br

(2) Usiminas Iron and Steel Company (Usiminas)

In addition to producing steel, the company also provides various solutions for the Brazilian industry involving the use of steel structures and steel. The company can provide a series of solutions for automobiles, ships, oil drilling platforms, tractors, industrial machinery, home appliances (such as refrigeration and stoves, etc.). The company is the largest local steel joint venture in South America.

The company currently has two large steel plants: one is located in Ipachenga, Minas State, and the other is located in Cuba pond in São Paulo State, with products mainly rolled plates. In addition, it has established a joint venture with Nippon Railway Corporation Unigal Usiminas to produce galvanized steel and other new steel varieties; Mineração Usiminas, the company\'s mining company, mines iron ore in Minas; Soluções Usiminas, a metal solution company under its jurisdiction, can provide a variety of metal distribution and processing solutions; and subsidiaries can provide a variety of capital products, technologies and service management.

Website: //www.usiminas.com.br

(3) Brazilian Iron and Steel Company (CSN-Companhia Siderúrgica Nacional)

Brazilian State Steel Company, Brazilian state-owned enterprise, the second largest steel manufacturer. National Steel Company has the largest complete steel production system in Brazil and is also one of the largest crude steel production plants in South America. National Steel Corporation accounts for 49% of galvanized steel and 98% of tin rolled products sold in Brazil, and is also one of the world\'s important tin rolled products manufacturers.

(4) ThyssenkrupCSA

ThyssenKrupp CSA Siderurgica do Atlantico invested US$8.2 billion in Rio de Janeiro to build the largest steel company in Brazil. Its largest single investment in the Brazilian steel industry was completed in 2010 and employs more than 30,000 employees. ThyssenKrupp Steel accounts for 73.13% of the shares and Vale accounts for 26.87% (a 15-year contract with ThyssenKrupp to supply iron ore to steel mills).

(5) Aperam

It is engaged in the production and operation of stainless steel, silicon steel and special steel, and has three departments: stainless steel and silicon steel section, service and solution section, alloy and special product section. Aperam has a production capacity of 2.5 million tons of stainless steel flat materials in Europe and Brazil. Its production is mainly concentrated in six factories in Brazil, Belgium and France, with about 9,800 employees, accounting for 25% of Europe and 65% of South America\'s market share.

Website: //www.aperam.com

(6) Arcelor Mittal Group (Brazil name ArcelorMittalTubarão Grupo)

The Arcelor Mittal Group is a global iron ore production and steel production enterprise, conducting business in more than 60 countries around the world, with employees up to 230,000. The steel products provided are used in the construction, home appliance manufacturing, packaging, and automobile industries. The products include various types of wire, plates, steel billets and corresponding derivative products, and also provide solutions for various steel structure needs. The crude steel production capacity in Brazil is 11 million tons and employs 11,000 people.

Website: //brasil.arcelormittal.com.br/

(7) Vorantinim Group (Vorantinim)

The Wotolanting Group is a steel company, mainly producing steel plates, bars, wires and mesh profiles. Its domestic market sales brand is Voraço. Its production capacity is 1.02 million tons of long materials and 550,000 tons of various finished materials.

Website: www.vsiderurgia.com.br

5. Advantages and shortcomings of Brazil\'s steel industry

(1) Advantages

With its resource advantages, Brazil has become one of the countries with the lowest production costs of steel. Brazil is dependent on iron ore and cheap labor and faces challenges in environmental protection and sustainable development. Brazil\'s steel industry benefits from strong market demand, especially the huge demand for infrastructure construction.

The industrial foundation of the southeast coastal areas is good, and cities such as Sao Paulo gather traditional industries such as steel and automobiles; the shipping conditions are superior, and the import and export logistics efficiency is high.‌; Hydraulic resources are fully developed.

As a member of the \"BRICS Five\", Brazil\'s steel companies have good profitability, attracting many international steel giants to come and invest. Especially between 2010 and 2015, the increase in global steel demand further boosted the growth of Brazil\'s steel production. However, the future development of Brazil\'s steel industry will face greater pressure on environmental protection standards and sustainable development. How to protect the environment while developing the economy will become a key issue that Brazil\'s steel industry needs to consider.

(2) Insufficient

The proportion of industry in GDP dropped from 36% in 1985 to 21% in 2023, with serious loss of manufacturing jobs; excessive dependence on commodity exports (minerals and agricultural products accounted for 68% of exports in 2023), and weak economic risk resistance; the level of automation in the manufacturing industry (robot density 15 units per 10,000 people), lower than the global average; industrial electricity prices and logistics costs are 40% and 60% higher than that in China, weakening international competitiveness.

6. Brazil strengthens protection of local steel industry

On July 27, 2025, the Brazilian Foreign Trade Commission (Camex) officially approved the extension of the steel import quota measures for 12 months, and significantly expanded the types of restricted products from 19 to 23. This policy adjustment continues Brazil\'s domestic steel industry protection strategy since 2024. Imports within the quota will still apply a tax rate of 9%-16%, but the part beyond the quota will face a high tariff of 25%. Anti-dumping measures are currently implemented on 26 steel products from 13 countries: including China, India, Germany, Russia, Malaysia, Taiwan, Romania, Ukraine, South Africa, Vietnam, Thailand, Indonesia and South Korea.

In order to stimulate industrial activities and the development of the steel industry, the Brazilian government has implemented a series of measures such as accelerating depreciation plan, a green mobility and innovation (Mover) plan, encouraging the issuance of bonds and the development of letters of credit. At the same time, in order to attract foreign investment, the government has also implemented new accelerated growth plans (PAC) and tax reforms to reduce bureaucracy and lower interest rates for innovative projects to enhance the industry\'s international competitiveness.

Looking around the world, Brazil is not the only country to tighten its steel import policy. In recent years, major economies such as the United States, the European Union, and India have strengthened their steel trade defense measures. This chain reaction indicates that international steel trade may enter a new round of rule reconstruction period. As the largest economy in Latin America, Brazil\'s policy direction is of the weather vane to the regional trade pattern.

As the wave of protectionism swept the world, international trade in steel, the \"industrial food\", is becoming increasingly politicized. Brazil\'s decision to extend and expand the quota system is not only an escort to domestic industries, but also a response to the changing global trade order.

7. Capacity expansion and technology upgrade

In May 2024, Brazil plans to invest 100 billion Brazilian real in the next five years to expand Brazil\'s steel production capacity, modernize and upgrade, establish new factories, and adopt advanced technologies to improve production efficiency and product quality. Major milestones are expected to be achieved by 2028. Some of the investment will focus on sustainable development and focus on greener technologies to minimize environmental impacts, including reducing carbon emissions and strengthening waste management.

Sustainability is also a major trend supporting the growth of Brazil\'s steel market, especially as the global push for green steel. The Brazilian steel industry is driving the growth of the Brazilian steel market by adopting more sustainable processes, moving towards reducing carbon emissions. Steel producers are gradually turning to electric arc furnaces (EAF) and direct reduction iron (DRI) technologies that consume less energy and emit less greenhouse gases than traditional blast furnace processes. With the encouragement and investment support of the government, the use of green hydrogen as a reducing agent is also becoming increasingly prominent in Brazil. As Brazil strives to achieve global decarbonization goals, the growth of green steel manufacturing is expected to improve Brazil\'s competitiveness in the international steel market.

8. Brazil\'s industrial development momentum is good

Brazil\'s total trade volume was US$599.5 billion in 2024, an increase of 3.3% year-on-year, the second highest since record in 1989. The \"World Economic Situation and Outlook\" recently released by the United Nations believes that Brazil\'s economy will maintain elastic growth and further stimulate the economic vitality of Latin America and the Caribbean.

In 2024, Brazil\'s manufacturing exports were US$181.9 billion, a year-on-year increase of 2.7%, hitting a new high since 1997. In 2024, Brazil\'s industrial output value increased by 3.1% year-on-year, and manufacturing output value increased by 3.7%. Among them, the aviation manufacturing industry performed well. Embraer delivered a total of 206 aircraft in 2024, an increase of 14% year-on-year.

The Brazilian government launched a new round of economic growth acceleration plan in 2024, involving projects such as highways, schools, housing, medical facilities, etc., with a total investment of approximately 55 billion reais. Large-scale infrastructure construction not only drives employment, but also provides more opportunities for foreign capital.

The “Brazil’s New Industry” plan is rewriting the economic script. Through special financing of 300 billion reais and tax incentives, the government has leveraged public and private investment of 3.4 trillion reais, covering six major areas including agricultural technology, national defense industry, and digital transformation.

The International Monetary Fund said that Brazil\'s economy has become more resilient in the past few years. In the medium term, tax reform, oil and gas production and green investment will further unleash Brazil\'s economic growth potential. International rating agency Moody\'s upgraded Brazil\'s public debt rating from Ba2 to Ba1 in October 2024, with a rating outlook of \"positive\". Brazilian President Lula also said on social media that he strives to make Brazil the sixth largest economy in the world by 2027.

Sinosteel Stainless Steel Pipe is\r\nthe Manufacturer and Supplier of Stainless Steel Pipe and\r\nSpecial Alloy Pipe

1. Overview of Mexico

The United Mexican States (Spanish: Los Estados Unidos Mexico), abbreviated as \"Mexico\", has a territory of 1.9644 million square kilometers, making it the third largest country in Latin America and ranks 14th in the world. The capital is Mexico City. In 2024, Mexico\'s total population will be 131 million.

Mexico is a Latin American economic power, a member of the US-Mexico-Canada Agreement (formerly North American Free Trade Zone), one of the world\'s most open economies, and has signed a free trade agreement with 50 countries. In 2024, the GDP was US$1.85 trillion, an increase of 1.2% year-on-year, and the per capita GDP was US$13,800.

Ink mainly exports crude oil, industrial products, petroleum products, clothing, agricultural products, etc. The main export target countries are the United States, Canada, the European Union, Central America, China, etc.; the main imports of food, pharmaceutical products, communication equipment, etc., and the main import sources are the United States, China, Germany, Japan, South Korea, etc. The total foreign trade volume in 2024 was US$1242.41 billion, of which the export volume was US$617.1 billion and the import volume was US$625.31 billion, an increase of 4.3%, 4.1% and 4.5% year-on-year respectively.

2. Overview of Mexican Steel

Mexico is currently the 15th largest steel producer in the world and the second largest steel producer in Latin America, occupies an important position in the global steel industry. In 2023, about 30 million tons of iron ore will be mined, 1 million tons of pig iron, 16.2 million tons of crude steel, and 19.9 million tons of steel. In 2024, the crude steel output will be about 13.7 million tons, downward details.

Mexico widely adopts the electric furnace continuous casting production process, and the finished steel is mainly structural alloy steel, special alloy steel and tool alloy steel.

The apparent consumption of Mexican steel is generally showing a volatile growth trend. The total apparent consumption of steel is 24.4 million tons, 21.9 million tons, 25.5 million tons, 29 million tons and 27.6 million tons respectively from 2019 to 2024. According to the World Iron and Steel Association\'s forecast, it will be 29.3 million tons in 2025. At present, Mexico\'s per capita steel consumption has exceeded the global per capita level, with 221kg in 2024.

Mexico is a net importer of steel. In 2024, 4.5 million tons of steel were imported, and the main sources of imports were the United States (32.5%), South Korea (15.7%), Japan (14.5), China (9.7%), etc.; 2.1 million tons of steel were exported, and the main destinations were the United States (77%) and other Latin American countries.

3. Major Mexican steel enterprises

Steel production is mainly concentrated in northern and central Mexico, and the country\'s major steel companies include AHMSA, Deacero, Grupo Acerero, Grupo Simec, etc.

（1） AHMSA

Mexican steel giant Altos Hornos de Mexico (AHMSA) is one of the largest state-owned enterprises in Mexico, involving steel production and related businesses. The annual production capacity of crude steel exceeds 5.5 million tons. It is located in Monclova, Coahuila, Coahuila. It was founded in 1942 and mainly uses coal and iron ore steelmaking in Coahuila and Chihuahua.

The steel giant ceased operations in 2023 due to insolvency, and the steel company, along with its own mines, will be sold as a whole, with the Mexican judiciary allocating funds from the sale to repay creditors. It is worth noting that Minosa has high-quality iron ore with proven reserves of 1.2 billion tons, which may become a key bargaining chip to attract strategic investors in the context of high international mine prices.

（2）Deacero

Deacero, one of Mexico\'s largest steel companies, is a member of ISRI and BIR. It has 3 smelting plants in Mexico with a total production capacity of 4.5 million tons. It has set up 18 large freight yards and multiple distribution centers throughout Mexico. Since 2009, it has been involved in the scrap metal industry, and has used its excellent hardware conditions to recycle large quantities of scrap metals including scrap copper, scrap aluminum, scrap steel and other scrap metals.

Customers are located in China, the United States, Canada, Japan, South Korea and Europe. Deacero uses scrap steel raw materials to produce steel products and export them to the United States, Europe, Central America, South America and the Caribbean. DEACERO recycles scrap metals to 50% of Mexico\'s national level.

（3） Grupo Acerero

Founded in 1995, it is a comprehensive steel and steel manufacturer. It is a steel plant located in San Luis Potosi, Mexico. It uses electric arc furnace (EAF) technology and an annual production capacity of more than 1.5 million tons. Like Deacero, it uses scrap steel raw materials to produce steel products. Mexico is the fifth largest steel bar manufacturer and also the Mexican steel plate manufacturer. Mainly exported to the Americas.

（4）Grupo Simec

Group Simec was incorporated in Mexico on August 22, 1990 and is headquartered in Guadalajara, Mexico. The company is a diversified manufacturer, processor and distributor of special bar quality, wire, rebar, structural steel and other products. It is the largest special bar steel (SBQ) manufacturer in North America, conducting production and commercial operations in the United States, Mexico and Canada.

Simec is an important manufacturer of Mexican structural and light structural steel products. The company\'s SBQ products are used in a wide range of highly engineered end-user applications, including axles, hubs and crankshafts, machine tools and off-highway equipment for automotive and light trucks. The company\'s structural steel products are mainly used in the non-residential construction market and other construction applications.

（5）ArcelorMittal Mexico

The steel mill of steel manufacturer ArcelorMittal Mexico is located in Lázaro Cárdenas, Michoacán, Mexico. The annual crude steel production capacity is about 6.4 million tons per year. At the same time, as Mexico\'s largest rebar producer, ArcelorMittal\'s Mexican branch has a market share of 18.9%, with a production of approximately 491,400 tons.

4. Mexican steel structure optimization and continuous expansion of output

In 2025, the Mexican steel industry is undergoing a stable capacity transfer, and investment projects are steadily advancing across the entire value chain from upstream to downstream processing. With demand increasing and companies intend to reduce their dependence on imports, several Mexican steel producers are promoting capacity expansion and technology upgrades.

（1） Deacero

Deacero plans to complete the upgrade of a 2.8 million ton/year steelmaking workshop and two wire plants by 2025, thus fulfilling its sustainable development commitment to reduce carbon dioxide emissions by 56% by 2030. Danieli supplies a new zero-basket arc furnace with a horizontal continuous scrap charge system to replace the existing No. 2 arc furnace, improving operational efficiency and minimizing environmental footprint by improving energy utilization and continuous productivity. In addition to the furnace body, the Q-Melt automatic process control components and Q3-intelligence technology, it also includes a technologically advanced sixth generation billet welded headless rolling (EWR) equipment and a new 130t/h high-speed bar finishing line, equipped with two Danieli HTC high-speed dual-channel systems and five automatic bar counting systems, which ultimately enables the Deacero 1.7 million tons/year wire plant to stably produce 9.5mm high-quality steel bars at a rolling speed of 40m/s.

In addition, Deacero also installed a new dual-module high-speed shearing machine for automatic rod cutting head and tail for the 1 million tons/year wire plant, as well as an oil film bearing wire spinning machine using Danieli patented technology. After the wire spinning machine is installed in the finishing mill unit, the unit allows a stable wire rolling speed of up to 120m/s. Advanced Danieli automation systems and technology packages will replace and update the original system, ensuring production control over the entire short-process plant.

In the first quarter of 2026, a short-process steel plant near the Arispe factory in Ramos is expected to be officially launched. The plant will use high-end environmentally friendly technology to produce long-material products. The factory has a 150-ton arc furnace, which has automatic raw material processing capacity, can carry out uninterrupted scrap steel loading, a double-station ladle furnace and a six-stream casting machine with a radius of 10m, equipped with a crystallizer stirrer and two cold beds. Also installed by Danieli, advanced automation solutions include a large Hi-Profile laser profiler for detecting typical rolling defects on the steel surface and a high-performance water-cooled vector-controlled driver for the steel rolling mills—the Q-Drive medium-voltage drivetrain. The plant can produce 1.5 million tons of steel per year and can reach 702mm in size. It is expected to help the development of Mexican manufacturing, petroleum industry and industrial construction sectors in the future.

（2） Grupo Acerero

Grupo Acerero is planning to start slab production and operations at a new steel plant in San Luis Potosi in September 2025. The $650 million project includes the installation of a new electric arc furnace (EAF), a ladle refining furnace (LF), a slab continuous casting machine with an annual output of 650,000 tons, and a medium-thickness plate production line with an annual output of 650,000 tons. According to the capacity improvement plan, the production scale in 2025 is expected to be 150,000 tons, and will gradually increase to 650,000 tons by 2028.

By then, the company will eliminate its import dependence on slabs that currently account for 85% of its production costs, and truly achieve a full supply chain integration from scrap steel to medium and thick plates.

（3）Suacero

In the third quarter of 2025, Suacero\'s new advanced wire rolling mill in San Luis Potosi will be put into production, thereby expanding its product portfolio. The factory is designed by the Italian Danieli Group and is equipped with a 10-pass BGV rapid finishing mill (using Multidrives M2 technology), Danieli structural control device, and a wire cooling line that can achieve quenching and tempering treatment. Other facilities include a vertical coil transportation system and baler provided by Danieli\'s Sund Birsta Company. The factory has an annual production capacity of 500,000 tons and will produce a variety of steel types including wire mesh steel. At present, the installation project has entered the final stage.

（4） Talleresy Aceros (TYASA)

In Ixtasocketland, Veracruz, the newly built steel rolling mill in Talleresy Aceros (TYASA) is scheduled to be put into production by the end of 2025 or early 2026. The factory is provided by Danieli and will produce 350,000 tons of annual production of special steel bars in the automotive and industrial sectors to replace imports. The factory adopts advanced heating, rolling and finishing technologies, including sizing machines, rack-step cold beds and cover-type annealing equipment. TYASA\'s current special steel production capacity is 20,000 tons per year. Through this expansion, the company strives to become a strategic supplier to first-class automobile and machinery manufacturers in Mexico.

（5）Ternium SA

By the end of 2025, Ternium SA will start a new hot-dip galvanizing production line at a new integrated steel plant in Pesqueria, Nova Leon. This production line with an annual capacity of 600,000 tons will process hot and cold rolled steel coils with thicknesses of 4.5 mm and widths of 1854 mm. The products are used in construction and non-exposed automotive parts. The production line is equipped with an automated steel coil processing system, advanced cleaning and annealing equipment, leveling machines, tension straightening machines and comprehensive visual inspection systems, and optimizes operations through predictive modeling and automation technology. The upstream smelting and flat material rolling facilities are scheduled to be put into production in 2026, and the entire industrial chain integration of the factory will be improved.

（6） End

After all the above projects are implemented, Mexico\'s total steelmaking capacity will increase by about 4 million tons to about 28 million tons, while the potential production capacity of long-form rolling will increase by more than 2.7 million tons, exceeding 17 million tons.

As various new and expanded steel projects continue to advance, Mexico will further consolidate its position as a competitive steel producer in the Americas. The emphasis on supply chain localization, capacity expansion and advanced technology integration shows Mexico\'s intention to maintain long-term resilience and transition to industrial modernization.

5. Mexico strengthens protection of local steel industry

The Mexican government unveiled a strategy to protect and strengthen the national steel industry in May 2025 as part of its \"Made in Mexico\" campaign launched in June.

The Mexican Ministry of Economic Affairs said the strategy aims to protect the domestic steel industry and thus protect Mexico\'s employment. It is reported that as part of the new policy, importing steel products from any country now requires registration with the Ministry of Economic Affairs in advance. This registration must include the details of the steel plant that supplies the steel to meet the necessary regulatory standards. The measure is intended to prevent traders and importers from using fake registration books to bring steel into the country.

6. Mexico\'s industrial development momentum is good

In 2024, more than 2,000 Chinese companies moved their production bases to Mexico, covering electronics, textiles, machinery and other fields. Mexican workers’ hourly wages are $3.8, compared with US$29.5 and China’s $6.67, the cost advantage is obvious, only 12.7% of the United States and 58% of China. In addition, the freight time from Mexico to the United States only takes 3-5 days, and the convenience of logistics makes Mexico a new market entry for Chinese companies.

Mexico attracted foreign direct investment (FDI) of up to US$36.9 billion, of which the manufacturing industry accounted for 53%, mainly concentrated in industries such as automobiles, electronics and pharmaceuticals. This trend has attracted many well-known companies to invest in and build factories, such as Tesla and BMW. Tesla plans to invest $10 billion in Mexico to build a factory, with production capacity expected to reach 1 million electric vehicles by 2025. In addition, BMW also announced an investment of 800 million euros to build a battery factory in Mexico.

Mexico also benefits from the implementation of USMCA policies. The USMCA policy has enhanced the competitiveness of Mexico\'s manufacturing industry and made it more stable in the global industrial chain. For example, at least 75% of automotive parts need to be produced in North America, a regulation that brings new development opportunities to Mexico\'s automobile manufacturing industry.

It is expected that by 2026, Mexico will attract up to US$48 billion in foreign capital, and the scale of \"near-shore manufacturing\" will also exceed US$1.2 trillion. However, with the rise of countries such as India and Vietnam, the competitive pressure on Mexico in the manufacturing sector has gradually increased. In order to maintain a leading position, Mexico must continuously improve its technical strength and supply chain resilience.

Sinosteel\r\nStainless Steel Pipe is one of largest Stainless Steel Pipe and Special\r\nAlloy Pipe manufacturer in china.