The Latin American steel sector’s recovery, which was expected in 2022, will occur in 2023, said Alacero in a news release today. Factors that postponed the recovery included the enduring effects of the pandemic, plus the war in Ukraine. Challenges for this year, Alacero said, include currency restrictions, inflationary pressures, and political uncertainties.
Despite depreciation of Latin American currencies, linked to the appreciation of the dollar and the impacts of the conflict between Russia and Ukraine, prices for raw materials decreased in general. At the same time, industries in the region are pointing to a moderate drop in demand.
Latin America’s apparent consumption, which totaled 74.9 million mt in 2021, should close at 67.8 million mt in 2022, Alacero said, which means the region should close 2022 with 105 kg/per capita, equal to the 2018-2019 average.
“Political uncertainties are also potential obstacles, which could interfere with the implementation of the structural reforms needed in the region,” said Alejandro Wagner of Alacero in the press release. “In 2023, the level of attention is increasing around expectations of lower global growth and less favorable financial conditions. Thus, a slow normalization of frictions in post-pandemic production chains would boost production growth in steel-consuming sectors. Therefore, we reinforce that the biggest challenges in 2023 for Latin American markets are increased inflationary pressures, additional foreign exchange constraints and political uncertainties,”
Fuel costs are also contributing to the steel sector’s performance, Alacero said, with gasoline prices rising steadily through 2022, impacting public transportation, government budgets and agriculture.
Data from Alacero indicate that in November 2022, crude steel production reached more than 4.9 million mt, 8.8 percent less than in the previous November and 6.5 percent less than the previous month.
Production of finished products reached 4.4 million mt, 0.9 percent higher than the same month last year and 3.7 percent lower than the previous month.
Imports of finished steel in October 2022, reached 1.9 million mt, 17.7 percent lower than in the same month of 2021 and 7.1 percent lower than in the previous month. In the first 10 months of 2022, imports totaled 21.3 million mt, 11.4 percent below the same period of the previous year.
As for exports, 663,200 mt were recorded in October 2022, 25.1 percent lower than in the same month of the previous year and 18.0 percent lower than in the previous month. In the first 10 months of 2022, exports totaled 9.1 million mt, 31.1 percent higher than the same period of the previous year.
Finished steel consumption totaled 5.8 million mt in October, 3.6 percent lower than the previous October and 1.2 percent lower than the previous month. In the accumulated of the first 10 months of 2022, consumption totaled 58.5 million mt, 8.1 percent below the same period of the previous year.