High energy and logistics costs are holding back the growth of Mexico's metals industry

The director of the Institute for Industrial and Economic Development of the country (IDIC) argues that energy and logistics costs are hampering the expansion of the metallurgical industry in Mexico. Over the past 10 years in Mexico, "the price of electricity has doubled, harming not only the steel sector, but also the weight of the domestic economy," he said.

In steel production, the share of primary costs that falls on electricity is about 25-35 percent of a manufacturer's costs. Last year, Mexico passed an energy reform law, opening up the country's energy sector to competitive bidding for the first time since 1938, including allowing private companies to invest in the oil and gas industries.

The reform has boosted new investment in the sector, but results will not be visible until two years later, when the necessary basic infrastructure is completed. Only then is the country expected to stabilize energy prices, and a price reduction is possible only in the long term.

Logistics costs are also quite high, and Mexico's new rail projects are still under development. Another solution currently under discussion is the use of rail lines by more than one company, according to industry experts. "Currently, only one firm is allowed to use specific lines. If more companies circulate at each site, then prices will be more competitive," added the director of the IDIC Institute.