US Pressures Mexico for Early Renegotiation of USMCA: A Strategic Move for the Future

US, Mexico

The Trump administration is pushing for an early renegotiation of the US-Mexico-Canada Agreement (USMCA), potentially as soon as this year. This could offer an opportunity to strengthen the commercial relationship between the three countries. According to Kennet Smith, a partner at consultancy Agon, this move is crucial for Mexico, which faces the challenge of navigating tariff tensions while preparing for future renegotiations. The immediate focus on the USMCA renegotiation could also bring long-term benefits to Mexico if handled strategically.

Tariff Concerns and Opportunities for Mexico

The recent series of tariffs announced by President Donald Trump, particularly on April 2 during what he referred to as "Liberation Day," had an interesting effect on the Mexican economy. The peso initially reacted positively, as Mexico was largely shielded from the new tariffs due to the protections within the USMCA.

Mexico's President, Claudia Sheinbaum, chose a strategy of not retaliating against Trump's tariffs. Instead, her administration has focused on working with the US on critical issues such as immigration, drug trafficking, and security. This approach has helped Mexico avoid a full-fledged tariff war. However, Smith notes that Sheinbaum’s administration needs to prepare for potential changes to the USMCA, such as coordinated action against imports from China, which could lead to new tariffs on Chinese imports entering Mexico.

Mexico's Strategy Moving Forward

Despite the challenges, Mexico has options to gain leverage during the renegotiation process. Smith suggests that Mexico could initiate a consultation process under the USMCA rules to address potential violations, particularly related to Trump's tariffs on steel, aluminum, and auto parts. Under the agreement, tariffs on these items have been increased from 2.5% to 25%, which Smith views as a violation that could be contested in the renegotiation talks.

Furthermore, Mexico could stand to benefit from the evolving tariff war. If the dispute continues, Mexico might be able to secure exemptions from these tariffs under a renegotiated USMCA, encouraging foreign companies to shift their manufacturing operations to Mexico. This could lead to a revival of nearshoring trends, which would bolster Mexico’s manufacturing sector.

Domestic Challenges Facing Mexico

While international opportunities may arise from the renegotiation of the USMCA, Mexico must also address its domestic issues. Valeria Moy, director of IMCO, highlighted that Mexico's attractiveness as an investment destination has been undermined by recent domestic reforms. These include changes to the energy sector, the removal of independent regulators, and the restructuring of the judicial power. Such actions have created uncertainty in Mexico’s business environment, which could deter foreign investments and undermine efforts to attract manufacturers from abroad.

Conclusion

The Trump administration's pressure for early USMCA renegotiation presents both challenges and opportunities for Mexico. While Mexico has managed to avoid the worst effects of the tariff war, it must remain vigilant in securing its interests during renegotiation talks. At the same time, Mexico must address internal reforms to ensure it remains a competitive and attractive destination for international investment.

Grupo Mexico Reports Strong 3Q Earnings Boosted by Copper Production and Strong Prices

Grupo Mexico

Grupo Mexico, a prominent conglomerate with interests in mining, rail, and infrastructure, has reported a significant increase in earnings for the third quarter of 2024, driven by higher copper production and robust sales prices.

The company produced 280,900 metric tonnes (t) of copper in Q3 2024, marking a 10.6% increase from the same period last year. Copper sales also saw an 8.2% rise, reaching 275,070t. This surge in production and sales comes as copper prices continue to climb. The average copper price for the quarter was $4.23 per pound, up 12.2% from the previous year, according to Comex data.

Strong Mining Division Performance

Grupo Mexico's mining division, represented by its subsidiary Americas Mining, experienced a strong performance with a 17.8% increase in sales, reaching $3.2 billion. Profits for the division surged by 55%, totaling $864 million. Despite a rise in the cost of sales (up 5.4% to $1.4 billion), the company’s profit margins remained robust.

The company’s overall profits reached $1 billion for the quarter, a 44% year-over-year increase, with revenues climbing 13.4% to $4.13 billion.

Key Mining Operations

The increase in copper output can be attributed to stronger production from Grupo Mexico’s mining operations in Peru and Mexico, particularly at the Toquepala, Buenavista, Cuajone, and Caridad mines. These mines played a crucial role in boosting the company's copper yield.

"Grupo Mexico was able to benefit from a favorable copper price environment which, combined with excellent production levels and stringent cost control, translated into excellent financial results, particularly from the mining division," the company stated.

Zinc and Molybdenum Performance

Grupo Mexico also saw significant improvements in zinc and molybdenum production during the quarter. Zinc production nearly doubled, reaching 31,080t, driven by the Buenavista Zinc concentrator. Zinc sales also rose by 50%, amounting to 37,355t. Zinc prices were up 14.5%, averaging $1.26 per pound in Q3.

Molybdenum production rose by 6%, reaching 7,270t, while sales saw a 5.6% increase to 7,326t.

Americas Mining and Global Expansion

The Americas Mining division, a key subsidiary of Grupo Mexico, oversees operations through Southern Copper in Mexico and Peru, as well as Asarco in the United States. These subsidiaries have been critical to the company’s solid performance in Q3 2024.

Grupo Mexico's diverse mining operations, strict cost controls, and favorable commodity prices have positioned the company for continued growth in the coming quarters.

Trade Tensions Derail BYD’s Mexico EV Plant Plan

BYD

Sheinbaum confirms no formal investment; U.S. tariffs undermine Chinese automakers’ North American strategy

BYD Faces Setback Amid Growing US-Mexico Trade Pressure

BYD’s plan to build a major EV manufacturing plant in Mexico appears to be falling apart due to escalating trade tensions. Mexico’s President Claudia Sheinbaum confirmed this week that BYD never made a formal investment commitment. This comes amid U.S. concerns that Chinese automakers are using Mexico to circumvent 100% tariffs on Chinese-made cars.

Sheinbaum emphasized that Mexico's trade priorities lie firmly within the USMCA framework and its alliance with the U.S. and Canada. “As we've said, you can invest in Mexico, but we take our trade commitments into consideration,” she said.

BYD’s Mexican Market Claim Met With Skepticism

In 2023, BYD expressed interest in building a plant to produce 150,000 cars annually and generate 10,000 jobs. As recently as mid-2024, it planned to announce a location by the end of the year. However, trade analysts had long cast doubt on the project’s viability, citing the U.S. tariff wall.

BYD executives insisted the plant would serve Mexico’s domestic market, not the U.S.

Still, industry experts like Herrera noted the project had little chance of bypassing U.S. protectionist measures. The situation reflects how geopolitics increasingly affects EV supply chain strategies across North America.

The Metalnomist Commentary

BYD’s withdrawal from Mexico marks a growing friction point between China’s EV ambitions and America’s industrial policy. For Mexico, balancing between Chinese investment and USMCA loyalty will define its strategic value in the clean-tech era.

As the global EV race intensifies, regulatory alignment and tariff policy may matter just as much as technology and capital.

Mexico Steel Import Restrictions Tighten as Government Purges Foreign Suppliers

Mexico Steel

Over 1,000 Steel Suppliers Face Removal Amid Triangulation Concerns

Mexico steel import restrictions are intensifying as the government moves to purge 1,062 foreign suppliers from its official registry. The Ministry of Economy uncovered irregularities in over 47% of registered foreign steel firms, with many found to be non-existent or misrepresented. Authorities are conducting site inspections in six countries, including Malaysia.

Anti-Tariff Triangulation Drives Trade Crackdown

The move aims to prevent tariff circumvention practices, especially the rerouting of Chinese steel through Mexico to access the U.S. duty-free. Mexico steel import restrictions follow U.S. accusations of trade triangulation and recent tariff increases under former President Donald Trump. Despite exemptions under USMCA, Banco BASE estimates Mexico faces a 19.51% effective tariff rate on goods entering the U.S.

Domestic Steel Use to Rise in Energy Infrastructure

Mexico’s government is pushing for more domestic steel usage in national energy projects. The state utility CFE plans to increase the use of Mexican steel in transmission towers from 30% to 60% by 2030. However, limited domestic suppliers for turbines and generators remain a bottleneck. Engineers are consulting on integrating Mexican-made cable and steel into upcoming infrastructure.

The Metalnomist Commentary

Mexico’s regulatory push highlights a broader shift toward trade transparency and domestic industrial development. The steel sector will feel immediate impacts, but long-term resilience hinges on capacity-building within Mexico’s heavy equipment supply chain.

Mexican GDP Outlook Dims as US Tariffs Impact Economic Growth Forecasts

Mexico

Mexican GDP outlook deteriorated significantly as the Institute of Finance Executives (IMEF) lowered 2025 growth forecasts for the fourth consecutive month due to escalating US tariff impacts. The Mexican GDP outlook now projects just 0.1% growth in 2025, down from 0.2% in April, 0.6% in March, and 1% in February, while 37% of survey respondents forecast economic contraction as trade restrictions increasingly affect Mexico's export-dependent economy.

Trade Disruptions Compound Economic Headwinds

Mexican GDP outlook reflects mounting challenges as effective tariff rates on Mexican exports exceed those imposed on Canada, Brazil, India, Vietnam, and other trading partners despite some US exemptions for goods meeting regional content requirements. IMEF economic studies director Victor Herrera warned that May trade data will likely reveal sharp declines in Mexican exports to the United States. Additional disruptions from screwworm outbreaks in cattle led to port closures and curtailed beef exports worth $1.3 billion annually.

Meanwhile, automotive sector concerns intensify as major manufacturers consider production relocations or scale-backs following Stellantis's confirmed plans to shift operations to the US. Reports suggest Nissan may close one or both Mexican plants, prompting Mexico to dispatch deputy economy minister Luis Rosendo Gutierrez to Tokyo for discussions with Mazda, Nissan, Toyota, and Honda executives. These developments threaten a cornerstone industry of Mexico's manufacturing economy.

Employment and Investment Climate Face Structural Pressures

However, employment forecasts reflect broader economic pessimism as IMEF reduced 2025 job creation projections to 200,000 from 220,000 in April. Mexico's social security administration reported only 43,500 new jobs over the past 12 months ending May 5th, highlighting labor market weakness. Constitutional reform uncertainty and potential US taxes on remittances create additional investment climate risks beyond trade policy challenges.

Therefore, monetary policy adjustments attempt to support economic activity despite inflation concerns. Mexico's central bank cut benchmark interest rates by 50 basis points to 9% on May 8th, marking the third reduction in 2025. IMEF projects year-end rates at 7.75%, down from previous 8% forecasts, while maintaining 2025 inflation expectations at 3.8% despite April's 3.93% consumer price index reading.

Currency Stability Masks Underlying Economic Vulnerabilities

Furthermore, peso exchange rate projections indicate modest weakening to Ps20.80/$1 by year-end compared to April's Ps20.90/$1 forecast. The peso recently strengthened to Ps19.34/$1, though Herrera attributed this movement to dollar weakness rather than peso strength. Currency stability provides limited comfort given underlying economic fundamentals deterioration across trade, employment, and investment indicators.

As a result, Mexico faces a challenging economic environment where tariff policies increasingly outweigh traditional competitive advantages in manufacturing and proximity to US markets. The confluence of trade restrictions, sectoral disruptions, and political uncertainties creates headwinds that monetary policy accommodation may struggle to offset entirely through 2025.

The Metalnomist Commentary

Mexico's rapidly deteriorating GDP outlook exemplifies how trade policy shifts can fundamentally reshape economic trajectories for manufacturing-dependent economies, particularly those integrated into North American supply chains. The automotive sector's potential restructuring represents a critical inflection point for Mexico's industrial base, while the increasing tariff burden highlights the vulnerability of export-oriented economies to protectionist policy changes in major destination markets.

Mexico’s GDP Outlook Brightens for 2024 Amid Economic Adjustments

Mexico

Private-sector analysts have slightly raised Mexico's GDP growth forecast for 2024 to 1.6%, up from 1.53% in the central bank’s final survey of the year. This revision follows the Mexican statistics agency Inegi's adjustment of third-quarter GDP growth to 1.6% from 1.5% in November, signaling a modest but positive trend for the country’s economy.

Mixed Forecasts for 2025 and Beyond

While 2024 projections showed a slight improvement, the 2025 GDP forecast has dipped to 1.12%, down from 1.2% in November. This forecast lags behind the central bank's projection of 1.2%, reaffirmed during its recent quarterly presentation. The central bank highlighted potential risks stemming from geopolitical uncertainties and evolving US-Mexico trade policies, which could affect the broader economic outlook.

For the first time, the December survey introduced 2026 projections, forecasting a modest GDP growth of 1.8%, alongside an easing of headline inflation to 3.7%. Analysts anticipate the Mexican peso exchange rate will reach Ps21/$1 by the end of 2026, reflecting gradual depreciation.

Monetary Policy and Exchange Rate Adjustments

Mexico’s central bank is expected to implement a 25-basis-point rate cut on 19 December 2024, reducing the target rate to 10%. Analysts forecast further reductions, with the target rate potentially declining to 8% by the end of 2025. For 2026, the central bank is expected to moderate its rate cuts, settling at 7.5% by year-end.

The December survey also included updated exchange rate forecasts, predicting the peso will trade at Ps20.25/$1 by the end of 2024, slightly stronger than the Ps20.29/$1 estimate from November. For 2025, the exchange rate is projected at Ps20.53/$1, a marginal adjustment from the previous Ps20.59/$1 forecast.

Key Economic Drivers

Several factors are shaping Mexico’s economic trajectory:

1. Monetary Policy: The anticipated rate cuts aim to stimulate economic growth while balancing inflationary pressures.
2. Geopolitical Risks: US-Mexico trade dynamics and global uncertainties continue to influence forecasts.
3. Currency Stability: The peso's relatively stable outlook reflects confidence in Mexico’s economic management and its trade relationships.

While near-term growth remains modest, the introduction of 2026 projections highlights the potential for a more stable economic environment, supported by easing inflation and a favorable monetary policy stance.

Grupo Mexico Copper Production Dips While Zinc and Molybdenum Surge

Grupo Mexico

Grupo Mexico copper production declined slightly in Q1 2025, but gains in zinc and molybdenum output, combined with price increases, drove strong revenue growth. The mining giant reported a 0.9% drop in copper output to 265,632 metric tonnes due to weaker performance at Asarco and Minera Mexico. Despite this, higher metal prices helped the company maintain profitability.

Zinc and Molybdenum Boost Mining Revenue

Grupo Mexico saw notable increases in zinc and molybdenum production. Zinc output soared by 49.3% to 39,375t, and molybdenum rose by 8.5% to 7,683t. The company attributed the gains to richer ore grades discovered at key sites. Meanwhile, copper prices surged 18.4%, while zinc and molybdenum rose 16.2% and 3%, respectively. These favorable price conditions led to a 18.7% increase in mining division revenue, reaching $3.35 billion.

Total Profits and Rail Freight Show Divergent Trends

Total profits across Grupo Mexico grew 15% to $2.32 billion in the quarter, despite logistical headwinds in its rail division. The company’s transportation unit moved 487,639 carloads from January to March, marking a 6.1% year-over-year decline. Still, the robust mining performance, driven by both production and commodity price strength, more than compensated for the transportation shortfall.

The Metalnomist Commentary

Grupo Mexico copper production faced short-term operational challenges, but strong commodity pricing and higher zinc and molybdenum grades preserved momentum. The company remains well-positioned to benefit from rising global demand for base and minor metals.

Grupo Mexico Boosts Copper and Zinc Output in Q4, Plans $600mn 2025 Investment

Grupo Mexico

Buenavista Expansion and Strong Prices Lift Revenues Despite Toquepala Setback

Grupo Mexico increased its copper and zinc production in the fourth quarter of 2024, supported by operational gains at its Buenavista, Cuajone, and IMMSA units. Copper output reached 266,400 metric tonnes (t), up slightly from 264,300t in Q4 2023, while zinc production more than doubled, rising to 43,150t from 16,930t a year earlier.

Copper production growth was driven by a 12% increase at the Buenavista mine, complemented by moderate gains at IMMSA (+3.5%) and Cuajone (+2.1%). However, these increases were partially offset by an 11.4% decline at the Toquepala mine in Peru. Despite mixed volumes, copper sales rose by 2.2% to 253,250t, supported by a 13.4% year-on-year price gain to $4.22/lb, based on Comex data.

Zinc Production Surges with Buenavista Launch and Santa Barbara Growth

The standout performance in Q4 came from zinc. Grupo Mexico more than doubled zinc production following the start-up of its Buenavista zinc operation and improved throughput at Santa Barbara. Sales volumes surged by over 59% to 42,119t. The fourth-quarter average zinc price also increased by 22.1% to $1.38/lb, based on LME figures.

Molybdenum output fell slightly to 6,994t due to weaker performance at Caridad and Toquepala, with sales also down 2.1% to 7,008t. Despite this, Grupo Mexico’s mining division, operated under Americas Mining Corporation, reported Q4 revenues of $2.97bn, up 17.4%, while profit surged by 51.5% to $673mn.

2025 Capital Plan Targets Modernization, Tailings Efficiency, and Greenfield Growth

Grupo Mexico plans to invest over $600mn across its mining operations in 2025. Roughly half will fund modernization of existing mines and metallurgical facilities, while 31% will go toward improving water and tailings efficiency. The remaining investments will support long-term growth projects, including a new 120,000t/yr copper SX-EW plant in Arequipa, Peru. Construction is scheduled to start in 2025, with operations expected by 2027.

In total, the conglomerate’s fourth-quarter profit rose by 19% to $757mn, with revenues climbing 12.8% to $3.85bn. Grupo Mexico operates across mining, rail, and infrastructure sectors, with mining activities led by Southern Copper in Mexico and Peru, and Asarco in the United States.

Mexico's Auto Industry Struggles with US Tariffs Despite USMCA Exemption

Mexico Car Tariffs

Despite the recent decision by US President Donald Trump to pause reciprocal tariffs on several nations, Mexico's automotive industry continues to face significant challenges. The 25% tariffs on exports of automobiles, steel, and aluminum, announced last month, remain in place. These tariffs, coupled with Trump's global 25% tariff on auto imports, continue to impact Mexican carmakers.

USMCA Exemption Still Leaves Uncertainty

Mexico and Canada do benefit from an exemption in the US-Mexico-Canada Agreement (USMCA) for imports that comply with regional content rules. However, the specifics of how this exemption will be implemented remain unclear. Mexico is still in negotiations with the US to eliminate or reduce the tariffs in certain cases.

Gabriel Padilla, head of the Mexican auto parts association INA, explained that their primary focus is to extend the tariff application to auto parts covered by the USMCA. He stressed the importance of demonstrating the integration levels by component grade to show what is beneficial for both countries. According to a recent INA study, the US’s 25% tariffs on steel and aluminum could cost auto parts companies $2.94 billion more in additional costs.

Negotiations and Uncertainty Continue

Despite ongoing negotiations, the uncertainty surrounding the tariffs is causing some companies to pause exports while awaiting clarity. Rogelio Garza, president of the Mexican automaker association AMIA, mentioned that some companies are hesitant to continue shipments until the impact of the tariffs becomes clearer. He expects more concrete definitions regarding the auto tariffs within the next two months.

Garza also pointed out that the paused shipments contributed to a 6% decline in Mexican auto exports to the US in the first quarter, as reported by the national statistics agency Inegi. The total exports fell to 775,886 units, down from the previous year's figures.

Conclusion: A Time of Adjustment for Mexico’s Automotive Sector

The automotive industry in Mexico faces a period of uncertainty as it continues to navigate the effects of US tariffs. While the USMCA exemption provides some relief, the lack of clarity on its implementation and ongoing negotiations leave many carmakers in a state of flux. The situation is further complicated by the high costs imposed by the tariffs on steel, aluminum, and auto parts. As negotiations unfold, the next couple of months will be critical for determining the future of the Mexican automotive sector.

Peru boosts Grupo Mexico's 2Q Cu, Zn output

Mining and transport conglomerate Grupo Mexico boosted its copper production in the second quarter this year, driven by increases in its Peruvian and Mexican operations.

The company produced 270,750 metric tonnes (t) of copper in the second quarter, up by 4.7pc from the year earlier period. The firm produced 538,740t in the first half, a 5.3pc increase from the same period in 2023.

The increase reflects increased copper production in Peru, as well as higher output at its Buenavista zinc concentrator in Mexico.

"Higher [copper] production in Mexico was partially offset by a decrease in [Arizona-based US subsidiary] Asarco's production," Grupo Mexico said.

Total copper sales in the quarter increased by 2.5pc to 260,050t from a year earlier.

The company resumed its Tia Maria copper project in Peru in July this year and said it expects to produce 120,000 t/yr of solvent extraction and electrowinning copper cathodes when it starts operations in 2027.

The company produced 29,420t of zinc in the second quarter, up by nearly 71pc on the year, also driven by the Buenavista Zinc concentrator. Zinc sales rose by 78pc to 39,000t.

Molybdenum production in the second quarter rose by almost 21pc to 7,655t from the prior-year period, while sales increased by 21pc to 7,640t.

The production and sales hikes came with higher average prices for the metals, the company also said.

Average zinc prices of $1.29/lb in the second quarter were up by 12pc from the same three-month span in 2023, based on London Metal Exchange numbers.

The average copper price of $4.55/lb in the second quarter was 18pc higher than the prior-year period, according to Comex figures cited by Grupo Mexico.

Second quarter total profits rose by nearly 60pc to $1.06bn on the year, with revenues increasing by 27.4pc to $4.4bn in the same period.

USAC Boosts Antimony Supply Chain with Australian Ore for Mexico Smelter

US Antimony

Texas-based US Antimony (USAC) has announced a strategic move to secure antimony (Sb) ore shipments from Australia, aiming to revitalize its Madero Antimony Smelter in Mexico. This initiative comes as the smelter plans to restart operations in March 2025, following a closure since March this year.

Strategic Import to Overcome Supply Challenges

The first batch of antimony ore sourced from Australia is scheduled to arrive at the west coast port of Manzanillo, Mexico, in March 2025. While USAC has not disclosed the initial volume or the supplier, the company anticipates a steady import rate of 300 tonnes per month as it familiarizes itself with the ore's chemical and metallurgical properties.

This import strategy is part of USAC's broader effort to diversify its supply sources. Historically reliant on imports due to the lack of domestic antimony mining, USAC's move is timely, especially following China's recent suspension of antimony exports to the US, a decision that has significantly impacted global supply chains.

Revitalizing Operations Amid Market Shifts

The decision to restart the Madero Smelter is a turnaround from March, when USAC had discontinued its operations in Mexico due to financial underperformance and ongoing negative cash flows. However, with antimony fundamentals strengthening and the necessity to secure non-Chinese antimony sources, USAC is positioning itself to capitalize on these new market dynamics.

USAC remains the only company in the US that produces primary antimony using imported feedstock, a critical factor given the recent geopolitical tensions affecting metal imports. The US heavily relies on imported antimony, with significant quantities previously sourced from China. According to Global Trade Tracker data, the US imported 15,665 tonnes of antimony metal from China from January 2022 to October this year, which accounted for 22% of US imports over the period, while antimony trioxide imports from China totalled 55,506 tonnes, making up 69% of the total.

BMW to Establish Five New High-Voltage Battery Plants

German automaker BMW is set to expand its production of next-generation high-voltage batteries with the construction of plants in five countries.

The new battery production facilities will be located in Lower Bavaria (Germany), Debrecen (Hungary), Woodruff (United States), Shenyang (China), and San Luis Potosi (Mexico).

BMW is adhering to a "local for local" supply chain strategy to enhance resilience and reduce the carbon footprint of its production processes.

In addition to this expansion, BMW has announced the introduction of the Neue Klasse vehicle, its latest fully electric model. The cars are scheduled to debut in 2025 in Debrecen, followed by production in China in 2026 and Mexico in 2027.

Prototype battery cells are currently being developed at the Cell Manufacturing Competence Centre (CMCC) in Parsdorf and the Battery Cell Competence Centre (BCCC) in Munich.

Summary

BMW is building five new high-voltage battery plants in Germany, Hungary, the US, China, and Mexico as part of a strategy to localize its supply chain and reduce its carbon footprint. The new fully electric Neue Klasse vehicle will debut in 2025, with production expanding to China and Mexico in subsequent years. Prototype battery cells are being developed in Germany.

Hashtags

English

#BMW #ElectricVehicles #BatteryPlants #SustainableEnergy #LocalForLocal #NeueKlasse #EVProduction #CarbonFootprint #GreenManufacturing #GlobalExpansion

Mexico’s Trade Deficit Surges in August Amid Rising Imports and Export Challenges

Mexico’s trade deficit reached $4.87 billion in August 2024, a sharp increase fueled by heightened imports and slowing demand for manufacturing exports. This August figure vastly exceeded June’s deficit of $72 million, according to final data from Mexico’s national statistics agency, Inegi. For the first eight months of 2024, the country’s trade deficit totaled $10.44 billion, up from $8.43 billion during the same period last year.

The widening deficit reflects stronger domestic demand for non-oil consumer goods, while a weaker North American manufacturing sector weighed on Mexico’s manufacturing exports. “Strong domestic demand boosted imports of non-oil consumer goods, while the weak North American manufacturing sector hurt Mexican manufacturing exports,” commented Alejandro Cervantes, head of quantitative research at Banorte.

Oil and Non-Oil Trade Divide

Inegi’s trade data separates Mexican trade into "oil" and "non-oil" categories. Oil encompasses crude oil, natural gas, and petrochemicals, while non-oil includes exports such as vehicles, agricultural goods, and minerals. In August, seasonally adjusted exports fell 2.8% from July, totaling $54.8 billion. Oil exports decreased by 4.1% to $2.25 billion, while non-oil exports declined by 2.7% to $49.7 billion.

Crude exports, valued at $1.72 billion, saw an average price of $72.24 per barrel, down from $74.86 in July and $76.88 in August 2023. Volumes also dropped to 716,000 barrels per day, down from 817,000 barrels in July and 1.11 million barrels a year earlier.

Imports, meanwhile, rose 3.4% in August to $56.8 billion, driven by a 5.4% increase in oil imports and a 3.2% rise in non-oil imports. Banorte analysts anticipate a potential slowdown in imports as costs rise and the export outlook remains uncertain. The depreciation of the Mexican peso since June, from Ps16.31 to Ps19.49 against the U.S. dollar by October 10, could stimulate exports but is likely to dampen import demand, particularly for consumer goods.

Strike Action Forces Suspension of Operations at Mexico’s Tizapa Mine

Mexico’s Tizapa

Labor dispute leads to indefinite halt in zinc and metal production

Mexican mining company Industrias Penoles has announced an indefinite suspension of operations at its Tizapa mine in the State of Mexico due to strike action initiated by the national mining union. The union claims that Penoles violated a collective labor agreement signed in April. In response, Penoles intends to pursue legal and administrative avenues to address the issue.

Ownership and Production Details

Penoles holds a 51% stake in the Tizapa mine, which extracts zinc, copper, lead, silver, and gold. Japanese companies Dowa and Sumitomo respectively own 39% and 10% of the mine. The zinc concentrate produced at Tizapa is sent to Dowa's zinc smelter in Akita, Japan. Last year, Tizapa produced 41,463 tons of zinc, 1,332 tons of copper, and 8,821 tons of lead.

US Antimony Secures Thai Antimony Ore for Mexico Smelter Restart

US Antimony

Strategic Supply Deal Aims to Boost Production Amidst Market Shifts

US Antimony (USAC) will source antimony ore from Thailand. This agreement supports the restart of its Madero smelter in Mexico. The initial shipment includes 50 wet metric tonnes (wmt). It will arrive at Manzanillo port in March. USAC seeks to increase ore quantities from this Southeast Asian source. This deal is the second supply agreement this month. The company aims to ramp up operations in Mexico. The Madero smelter closed in March due to profitability issues. Market demand for non-Chinese antimony has increased. China suspended antimony exports to the US. This incentivized USAC to restart its furnaces. Maintenance work includes new refractory linings. USAC also seeks to increase liquidity via a $100 million shelf offering. Regulatory approval is still required.

Increased Liquidity and Strategic Sourcing

USAC's move to secure antimony ore from Thailand is strategic. This addresses supply chain vulnerabilities. The company is actively working to enhance its financial stability. The $100 million shelf offering will provide needed capital. This will support operational expansion and maintenance.

Market Dynamics and Future Outlook

The suspension of Chinese antimony exports significantly impacted the market. This created opportunities for other suppliers. USAC is positioning itself to capitalize on this demand. The company's focus on restarting the Madero smelter is crucial. Increased production will meet market needs. USAC's efforts highlight the importance of diversified supply chains.

US Antimony Secures Antimony Ore Supply from Thailand for Mexico Smelter Restart

USAC

US Antimony (USAC) has secured a new antimony ore supply agreement with a supplier in Thailand to support the restart of its Madero smelter in Mexico. The Texas-based company announced that the first shipments, totaling 50 wet metric tonnes (wmt), will arrive at Manzanillo port on Mexico’s west coast in March 2025. This deal is part of USAC’s broader strategy to re-establish its Mexican operations after shutting them down in early 2024 due to profitability concerns.

USAC’s Expansion Amid Rising Demand for Non-China Antimony

USAC’s agreement with Thailand marks its second antimony supply deal this month, as the company works to secure alternative sources of the critical metal. The firm has not disclosed the total contract volumes or the identity of its supplier but has indicated that ore shipments are expected to increase significantly in the coming months.

The timing of USAC’s expansion coincides with rising market demand for antimony sourced outside of China. China, the dominant supplier of the metal, recently suspended exports of antimony to the US, prompting companies to seek alternative sources. As a result, USAC has accelerated plans to restart its Madero smelter, which is currently undergoing maintenance and refractory lining replacements.

Market conditions have also been favorable for USAC’s decision. Antimony prices have surged, with 99.65% antimony recently assessed at $18.10-$18.30 per pound CIF US, representing an astonishing 256% increase compared to the previous year.

USAC Strengthens Financial Position with $100 Million Shelf Offering

To support its expansion efforts, USAC has also filed for a $100 million shelf offering, which will provide liquidity flexibility over the next three years. This move, pending regulatory approval, will allow the company to sell securities to raise capital when needed, ensuring it has the financial resources to scale up operations and secure long-term supply agreements.

Conclusion

As China’s export restrictions on antimony continue to reshape global supply chains, USAC is positioning itself as a key supplier by sourcing antimony ore from Thailand and restarting its Madero smelter. With stronger market demand, soaring antimony prices, and a new financing strategy, USAC is well-placed to capitalize on the shifting dynamics of the antimony market.

Torex Produces First Copper Concentrate at Media Luna Mine in Mexico

Torex Gold

Copper Production Begins at Torex's Media Luna Site in Guerrero

Torex Gold has officially produced its first copper concentrate at the Media Luna mine in Guerrero, Mexico. The underground deposit forms part of the Morelos complex, which includes gold and silver alongside copper. Torex aims to increase throughput once its new paste plant begins operations in Q2 2025. As a result, the mine’s projected operational lifespan has been extended to at least 2033.

Copper Output to Reach 20,000 t/yr by 2026

According to Torex, Media Luna could yield approximately 20,000 tonnes of copper annually once at steady-state operations. Torex expects to achieve mining rates of 7,500 tonnes per day by mid-2026, according to CEO Jody Kuzenko. This milestone positions the company to diversify beyond gold and secure a footprint in copper for the energy transition.

The Metalnomist Commentary

Torex’s entrance into copper production reflects a broader pivot among gold miners toward energy transition metals. As global demand for copper accelerates, this development could enhance the long-term value of Torex’s Guerrero operations. The integration of Media Luna into a multi-metal portfolio strengthens its strategic appeal in a tight copper market.

Safran Navigates Tariff Risks While Targeting Leap Engine Production Surge

Safran

Rising Demand from Airbus and Boeing Drives 2025 Leap Engine Outlook Despite Cross-Border Trade Concerns

Safran, the French aerospace giant, is closely watching potential U.S. tariff exposure as it plans a sharp increase in Leap engine production. Growing demand from both Airbus and Boeing is fueling the ramp-up, yet Safran remains cautious due to the complex global supply chain behind its CFM International joint venture with GE Aerospace.

Although Leap engine demand is set to rise, Safran's supply chain spans multiple countries. Components for the Leap 1A and 1B engines cross borders between France, the U.S., and Mexico, making them vulnerable to any future trade policy shifts. CEO Olivier Andriès emphasized this risk during the company’s full-year earnings call, stating that the impact of tariffs remains uncertain without knowing their exact scope.

Leap Engine Production Targets Face Supply and Policy Headwinds

Safran delivered 1,407 Leap engines in 2024, a drop from 1,570 units in 2023. The decline stemmed from high-pressure turbine (HPT) constraints on the 1A variant and reduced Boeing 737 MAX production, which affected the 1B. Nonetheless, the company reaffirmed its 2025 delivery target of 1,618–1,688 Leap engines, reflecting a 15–20% increase.

To support this growth, certification of a new HPT blade for the 1A is expected in 2025. Additionally, approval for an updated blade on the Boeing variant will help ease production bottlenecks. However, Safran acknowledged that both supply chain capacity and potential U.S. tariffs remain the two largest risks to this ramp-up.

Strong Growth Across Airbus Programs Offsets Leap Shortfall

Outside of the Leap program, Safran reported growth across several Airbus platforms. A320neo nacelle deliveries rose 7% to 622 units, while A330neo nacelles increased 15% to 62 units. Landing gear sets for the Boeing 787 jumped 37% to 41 units, while A320 landing gear sets rose 3% to 601.

In legacy engines, deliveries of the CFM56 rose 15% to 60 units, while high-thrust engines increased 3% to 195 units. Military M88 engine deliveries dipped slightly by two units, totaling 40.

As Safran prepares to scale production in 2025, its global manufacturing footprint—spanning over 18 sites in Mexico, 7 in Canada, and 24+ U.S. states—positions it well for long-term growth, but also increases exposure to trade risks.

Global Refined Zinc Market Slips into Deficit in 2024, Reports ILZSG

ILZSG

Declining Supply Triggers Market Deficit Despite Steady Demand

The global refined zinc market fell into a deficit of 62,000 tonnes in 2024, as supply dropped while demand remained stable, according to the International Lead and Zinc Study Group (ILZSG). This marks a significant change from the previous year, when the zinc market recorded a surplus of 310,000 tonnes.

Zinc Mine Output Drops Across Key Regions

Global mined zinc output declined by 2.8% year-on-year to 11.89 million tonnes. Major contributing factors included a sharp 31.5% drop in Canada, a 1.5% decrease in China, and a 13.5% fall in Peru due to lower production at the Antamina mine. European zinc mining also slipped by 9.7%, mainly from Ireland and Poland. However, higher output in Bolivia, Mexico, and the Democratic Republic of Congo—where Ivanhoe Mines launched the Kipushi mine in June—helped offset these declines.

Refined Zinc Production and Use Trends

Refined zinc production dropped 2.6% in 2024, reaching 13.55 million tonnes. The fall was primarily due to limited concentrate availability and production cuts in China, Japan, South Korea, and Canada. Some recovery was seen as France, India, and Germany increased their output, especially with the Nordenham smelter resuming operations in March. Meanwhile, global refined zinc consumption edged up by 0.1%, driven by higher demand in Brazil, India, South Korea, Mexico, Turkey, and Vietnam. Consumption declined in China, Europe, and the US. Notably, China’s imports of zinc in concentrate form also fell by 13.1% to 1.96 million tonnes. In December alone, refined zinc use outpaced production, creating a monthly deficit of 41,100 tonnes.

US Titanium Scrap Imports and Exports Surge in Q3 Amid Global Trade Shifts

Titanium Scrap

The U.S. Titanium scrap market witnessed a notable upturn in both imports and exports during the third quarter of 2024, driven by reduced domestic scrap generation rates and favorable margins in international markets. According to recently released U.S. customs data, titanium scrap imports climbed 8.8% year-over-year to 7,484 metric tonnes (t), marking the highest quarterly total since Q2 2019. Exports, meanwhile, surged by 33% to 3,088t, the strongest performance since Q1 2021.

Titanium Scrap Imports: Supply Chain Adjustments

The U.S. market's reliance on foreign titanium scrap intensified as domestic supplies tightened. Imports from the UK rose sharply, increasing by 36% to 1,386t, compensating for declines from other key suppliers like Germany and Japan, which saw reductions of 5% (1,002t) and 20% (743t), respectively.

Shipments from emerging suppliers saw significant growth, with double-digit percentage increases from Singapore, Italy, South Korea, Mexico, and France. These diversified sourcing strategies reflect global trade adjustments amidst fluctuating titanium market dynamics.

Exports on the Rise: International Margins Drive Growth

On the export front, U.S. merchants capitalized on improved margins in international markets. The UK remained the top destination for U.S. titanium scrap, with shipments reaching 745t—a more-than-fourfold increase compared to Q3 2023.

Mexico exhibited the highest year-over-year percentage growth, receiving 300t in Q3 2024, a dramatic increase from just 19t in the same period last year. Estonia also displayed substantial growth, importing 208t, up 285% from the prior year. However, India reduced its imports of U.S. titanium scrap by 38% to 286t, reflecting a shift in trade dynamics within the region.