Mr. Gutierrez serves as Director in Mexican and American trade organizations and chambers. He was president of CANACERO, the Steel Chamber Organization of Mexico, and remains an active member of several local organizations.

DeAcero offers products such as cables and cords, chains, chain link and barbed wire fence materials, nails and screws, staples, and bailer and prestressed concrete wires, with customers spanning the US and 26 other countries. SteelOrbis recently interviewed Mr. Guttierez to get his long product sector outlook for the Americas. This interview was featured in the November/December 2009 issue of Prime Magazine.

What are the strongest and weakest long steel product markets in the Americas currently?

We are only involved in the wire rod and rebar markets within the long steel segment. So in the case of these two products I would say the weakest is the rebar market because it is related directly to the construction market, and the strongest, or less-weak, is the wire rod market, partly because there is not enough production capability and also because there have been very few imports.

In general, I think all the markets are very weak, especially the construction-related markets; I would say the least weak is the manufacturing industry with the exception of the auto industry.

How is Mexico's internal demand for steel faring under the weight of the country's economic troubles?

The internal demand in Mexico has been very low -- similar to what's been happening in the USA. However, I believe the recovery will be faster in the USA than in Mexico. Mexico's low internal demand is due to the fact that Mexico has inherited the economic problems from the world, and principally from the USA, as 80 percent of Mexico's total exports go to the USA. Mexico did not have real estate problems or financial problems or a weak balance sheet. But because we are very much dependent on the world and US markets and also on the production and price of oil (oil revenues in Mexico represent 35 percent of the country's total budget), our economy has been hit, as has our internal demand for steel. Mexico's economy in 2009 is expected to come down by eight percent, making it one the worst performers in the world.

The first semester was very weak but not as bad as we predicted, mainly because we were carrying the inertia of past projects, especially the ones related to construction. In the second semester it seems that things are going to be weaker that we had predicted. It doesn't look good for all the reasons I have given you, plus the fact that there is a more profound lack of confidence in our government's performance. There is a lack of consensus between the parties for new reforms and now there are some new government initiatives that are going counterflow, since they want to raise corporate, individual and consumer taxes instead of lowering them to promote investments and consumption.

Has the recession resulted in any change in DeAcero's trading patterns, such as selling more or less product to the local market vs. the international markets or vice versa?

As you know, DeAcero has been involved in the local and international markets for many years and we have not changed our trading patterns in that sense. However, even though we see that all of the world markets have come down, there have been some regions that have not been so bad -- an example of one of these is South America.

We have also seen that the reduction of exports from China in our product lines is also helping other players to become more involved in the international markets.

What are your expectations for the Americas' longs markets in 2010?

I expect a good recovery in 2010 but I think it will not be until 2012 that we get to the levels of 2008. We are beginning to see some recovery in our products, but part of this recovery has been frp, the different stimulus packages and inventory-related demand. I don't see a fast recovery. I think it is going to be a slow recovery because, especially in the US, stimulus packages are ending. In the case of the US, the country's balance sheet still shows a huge deficit and it is not going to be easy to maintain it, let alone lower it.

The recovery in 2010 will be pretty good versus 2009 but that is a very low standard. So to return to the levels of 2007 and 2008 I believe it will  take two or three more years after 2010.

Do you expect more consolidation among steel mills and downstream wire producers in the Americas to take place over the coming years?

I think there will be more consolidation among steel mills but not as much as in the past. On the side of steel mills there are still some small producers and some medium ones that would see benefits in consolidation. As far as downstream wire producers, there will be some more consolidation since there are still a lot of small operations and also a lot that are in trouble and are in the need for capital or consolidation.

Many steel producers are very skeptical about steel futures. What is your opinion on the use of the financial hedging products in the steel industry?

I am also skeptical about steel futures. I don't like these types of financial products and I think they are mostly for speculators.

What is DeAcero's growth strategy for the coming years?

We stopped investments at the end of 2008, but we just started this September again with investments in our scrap processing, steel and wire businesses. Our main strategy for the past 12 months has been to cut cost and expenditures all over. Fortunately, we have been very successful. Before the crisis, we had a very strong balance sheet and we still have it today. Now that we see some light at the end of the tunnel, we have started to reopen investments that could further reduce our costs, while also expanding some of operational capabilities in our scrap processing division and investing in some new product lines, particularly in our wire processing division.