Long-term regional factors and political transitions in several countries have contributed to a very challenging environment in Latin America at a moment of low dynamism in the world economy (thanks to the slowdown in developed and developing countries), Alacero said in a press release today.
According to the Economic Commission for Latin America and the Caribbean (ECLAC), excluding Venezuela, the average GDP growth in Latin America is increasing, but only 1 percent per year, partly reflecting the largest recession since World War II experienced by Brazil, the largest economy in the region. The stagnation of the economy in Mexico since the beginning of 2019 and also the macroeconomic imbalances observed in Argentina, in addition to the global financial crisis, unrest in countries such as Ecuador, Bolivia, and Chile, also undermined the economic performance of Latin America, Alacero said.
In this context, the consumption of rolled steel in October was 5 percent lower than the total registered in the same period of 2018. Despite the 4 percent increase compared to September 2019, the accumulated until October remained 5 percent lower than in the same period of the previous year. Even so, it was 0.3 percent higher than the average for the first 9 months. The balance had a slightly positive trend, totaling 202,000 tons, 4 percent above the result observed in September. The growth is due in large part to the consumption of Guatemala (26 percent), Argentina (24 percent), Brazil (17 percent), Mexico (16 percent) and Ecuador (14 percent).
In November 2019, crude steel production totaled 4.828 million mt, 10 percent less than November 2018. The accumulated until November (55.722 million mt) was 8 percent lower than the same period of the previous year. The result was 5 percent below the average of the first 10 months. Mexico was responsible for the largest part of the fall (58 percent) and registered the worst indicator since March 2016.
Rolled steel production reached 3.971 million mt, 10 percent less than November 2018. The accumulated until November also fell 8 percent compared to the same period of the previous year. Upon reaching the lowest level in 35 months, the total decreased by 4.3 percent compared to October and showed a 6 percent lower result than the average of the first 10 months of 2019. Much of the negative regional balance is due to the deficit of Brazil (75 percent) and Argentina (36 percent), which experienced decreases in their annual and monthly productions.
“We cannot expect markets to solve socio-economic problems by themselves. Governments should review their public policies to stimulate growth and prioritize sustainable development, taking advantage of the current low cost of financing. We need to refocus our efforts towards exports,” said Francisco Leal, General Director of Alacero, in the press release.
With a total of 1.929 million mt, October imports were 6 percent lower than the same month of 2018. The accumulated until October remained 3 percent below the equivalent period in 2018. However, there was a 10 percent increase in comparison to September, which had already registered a punctual decrease due to the volatility of the Mexican market.
The result was 0.4 percent higher than the average for the first nine months of 2019. The largest increases in imports were observed in Guatemala (54,000 mt), Ecuador (30,000 mt), Brazil (23,000 mt), Argentina (17,000 mt) and Chile (12,000 mt). In the first 11 months, China's rolled steel imports fell 27 percent in Latin America. In January, the total imported was 559,000 mt, while in November it was 410,000 mt.
October exports reached 836,000 mt, 9 percent above the result seen in the same month of 2018. Although the accumulated (7,655 mt) was 4 percent lower than the same period of 2018, the total registered a 14 percent growth compared to October of the previous year, the best indicator since May 2019. The result of exports was 9 percent above the average of the first nine months. Brazil expanded its exports by 12 percent, followed by Mexico (15 percent) and Argentina (20 percent).
In October, the trade balance registered a 15 percent lower deficit than the same month of the previous year and presented a 3 percent drop in the accumulated deficit until October compared to the same period of 2018. Although in October the deficit was 7 percent higher than in September, the total was 6 percent lower than the average of the first nine months of the year.