Grupo Simec highlights that competition in the steel industry is significant and exerts downward pressure on prices.
Due to high initial costs, the economics of operating a steel mill on a continuous basis can encourage mill operators to establish and maintain high levels of production even in times of low demand, further decreasing prices and profit margins.
Grupo Simec’s main competitors
The company believes that the closest plants of its competitors to the Southern California market are: Nucor, Corporation, located in Plymouth, Utah; Commercial Metals Company, located in Meza, Arizona; Thyssenkrupp Steel North America, located in Santa Fe Springs, California; Deacero, located in Saltillo, Coahuila, México and Gerdau Corsa, located in Tijuana, Baja California, México.
Grupo Simec considers that it has an advantage over certain competitors due to the labor cost in its Mexican operations.
The company believes that its main competitors in the United States market, depending on the product, include Nucor, Corporation, Niagara LaSalle, Corporation, Charter Steel, Steel Dynamics, The TimkenSteel Corporation and Gerdau.
Grupo Simec’s largest competitors in the Brazilian market are Aperam, ArcelorMittal Brasil, CSN, Gerdau, Sinobras, Thyssenkrupp CSA; Usiminas, VSB tubes, V & M do Brasil and Villares Metals.
The recent consolidation trend in the global steel industry may further increase competitive pressures on independent producers the size of the Sidec Group, particularly if the large steel producers formed through consolidations, who have access to more resources than we do, adopt Predatory pricing strategies that lower prices and profit margins.
The company is a diversified manufacturer, processor and distributor of structural steel and SBQ steel products with production and commercial operations in the United States, Mexico and Brazil.
The company’s SBQ products are used in a wide range of highly engineered end-user applications, including axles, hubs and crankshafts for automotive and light truck, machine tools, and off-highway equipment.
Also, its structural steel products are used primarily in the non-residential construction market and other construction applications.
In the United States, Mexico and Brazil, the company owns and operates 15 state-of-the-art steel manufacturing, processing and/or finishing facilities with a combined annual installed crude steel production capacity of 5.3 million tons and annual rolling capacity combined installed capacity of 4.5 million tons.