Colombian steelmaker Acerias de Colombia (Acesco), requested that the local government incentivize domestic steel consumption, as the steel industry deals with the impact of Covid-19, a media report from La Republica said.
Felipe Gonzalez, CEO at Acesco, said the Colombian steel industry had to halt operations for a few weeks due to Covid-19. Gonzalez expressed concerns over the fact foreign steel, especially from China, could supply the Colombian market.
“Colombia is one of the countries with the best industry infrastructure in the region, however, the level of vulnerability at the supply chain over the global exceeding steel surplus and unfair (steel) price (product) competitiveness is big,” he said, adding the pandemic resulted in a weaker domestic demand for steel.
“And the worst thing that can happen is to have (domestic) demand supplied by non-Colombian steel,” he said.
The Colombian steel market is supplied by a few domestic producers, including Acesco, Votorantim-owned Acerias Paz del Rio, and Gerdau Diaco.
Colombian crude steel output in April plummeted 71.8 percent, year-on-year, to 33,089 mt, according to recent data from the Committee of Steel Producers (CPA). Colombian long finished steel products were the most affected due to Covid-19. Colombian long finished steel output in April was 9,720 mt, down from 117,271 mt in April 2019, according to CPA.
Earlier in April, the Colombian Steel Chamber (Camacero) urged the government to delay steel importing and IVA taxes for 90 days, so the industry could unload existing shipments stopped at local ports. Camacero said at the time that delaying steel importing and IVA taxes would relieve the sector, which has “weak liquidity” to pay for both the steel shipments and the steel-related taxes.
At the time, Camacero estimated there was about 130,000 mt of steel stocked at Colombian ports that needed to be released. Camacero said that another 300,000 mt of steel imports should arrive at Colombian ports “in the next few months,” and those orders also need to reach their customers.