Posco Seeks Facilitation Of Steel Imports To Mexico Against US

South Korea's largest steelmaker Posco turned to Mexico for steel import assistance after failing to persuade the United States to lift the Korean steel quota.

According to the Korean steel giant, the company has asked the Mexican government to consistently increase its import quota for automotive cold rolled steel sheets over the next five years.

Specifically, Posco said it has filed a petition to increase the import quota from 547,500 tonnes this year to 585,000 tonnes next year, 606,000 tonnes in 2021, 633,000 tonnes in 2022 and 677,000 tonnes in 2023. Another Korean steelmaker Hyundai Steel is also reported to have made a similar request.

The Mexican government is expected to respond within a year.

This comes after Washington announced last Friday that it was lifting its one-year tariffs on steel and aluminum with NAFTA partners Mexico and Canada, while maintaining the cap on Korean steels. Korea has avoided washing out 25 percent steel tariffs from the US, but must keep shipments below 70 percent of the annual average. Posco lobbied actively for a US quota waiver, but failed.

In 2009, Posco opened a Continuous Galvanizing Line (CGL) in Altamira, Tamaulipas, eastern Mexico. Electroplating refers to the process of zinc plating on base steel to prevent rust and increase durability. Galvanized steel is widely used in vehicle exterior panels, and the steel produced at the Altamira plant is supplied to car manufacturers such as Volkswagen, General Motors, Chrylser and Kia Motors in Mexico, as well as to manufacturers in the American South.

In 2011, Posco increased production in Mexico to 800,000 tonnes per year to meet growing demand at Latin America's largest automotive base. The company operates other CGL lines in India and China.

In 2013, his operations found themselves in a quandary when Mexican officials launched an anti-dumping investigation into Korean cold-rolled steel sheets. Initially, the government considered introducing Korean steel with countervailing duties of 6.45 percent, but later canceled its plans and selected import quotas for specific companies. Posco's share in 2018 was set at a quota of 545,000 tons.