Argentine production of steel, iron dropped in Q1

Argentina’s crude steel production fell in Q1 2009 to 798,000 mt or 41.7 percent compared to the same period of the previous year, announced Argentine steel association, Center for Industrial Steel (CIS), Thursday.
 
Primary iron production was hit harder as accumulated production in Q1 only reached 581,100 mt, or 52 percent less than last year.

The report cites the economic crisis which has affected both local and international steel demand as the main reason behind the Q1 production decreases. Areas of steel consumption that have been particularly affected include automotive, construction, household goods and capital goods, said the report.
 
The report forecasts an international steel demand drop for 2009 averaging 15  percent, with declines as sharp as 40 percent in certain regions, such as the US. Furthermore, it cautions that a serious imbalance in the flow of international trade could develop, as the sharp drop in demand has left the steel industry with an “alarming over-production capacity”, particularly in regions that mainly export their steel products to international markets, such as China and the former Soviet Union.
 
The report expressed the CIS' concern over the fact that Argentina and other Latin American countries have recently been seeing an increased flow of Chinese steel imports, which, under normal circumstances, would have not been competitive enough to displace the local supply, but may pose a threat in the current economic climate.

“These imports, which in many cases do not take into account the rules of fair trade, could impact heavily on production levels and therefore on the business of local steel companies,” the report warned (translated from Spanish).