According to data released by the Latin American Steel Association (Alacero), in the first seven months of 2019, Latin America posted its lowest rolled steel trade deficit in 16 months with 2 million mt. In the first six months of 2019, the rolled steel deficit totaled 6.94 million mt, as compared to the 6.95 million mt recorded in the same period of 2018. Brazil and Argentina were the only markets which posted rolled steel trade surplus, with 1.2 million mt and 124.000 mt respectively.
In addition, Latin American rolled steel consumption has also decreased, which represents the low activity of the steel industry in Latin America, combined with political uncertainty and the economic slowdown. In June, steel consumption in Latin America decreased by 11.75 percent year on year and in the first half of 2019 it decreased by three percent year on year. In the January-June period of this year, crude steel production fell five percent and rolled steel production fell by six percent year on year in the region.
According to Alacero, in June Latin America imported 1.7 million mt rolled steel, 17.5 percent lower as compared to the previous month. In the first half of this year, rolled steel imports decreased by two percent year on year. The share of imports in regional consumption was 36 percent, one percentage point lower than the 37 percent recorded in the January-June period of 2018. Rolled steel exports from the region decreased by nine percent in June compared to the previous month and fell six percent in the first half of this year as compared to the same period of the previous year.
In July, crude steel production in Latin America decreased by five percent month on month and 15 percent year on year, mostly driven by lower output in Brazil.
“This situation shows that the Latin American economy has an opportunity there to grow in consumption by stimulating domestic production, with the aim of supplying regional demand. Together with the decreases in consumption, declines in production point to a dependence on US trade agreements with China and others such as the European Union, and at the same time they are signs of deindustrialization and loss of competitiveness,” stated Francisco Leal, general director of Alacero.