Alacero, the Latin American Steel Association, reported data today that show the growth outlook for the sector in Latin America for late 2022 and early 2023 is moderate, given the context of global inflation and contractionary monetary policy, with banks in Latin America and the United States tightening their monetary policies.
“The forecast is driven by lower external demand, weakened by high interest rates and falling purchasing power. The world is going through an unprecedented inflationary process, widely distributed across countries,” said Alejandro Wagner, executive director of Alacero, in a press release.
According to data from Alacero, the slowdown will spread throughout Latin America, adding the external challenges of the global situation, such as the energy crisis in Europe and the war in Ukraine, to the local challenges, such as inflation. The growth forecast for 2023 is low, even higher than expected in China and the US, the region’s main trading partners.
Alacero reported that in Latin America, construction fell by 1.8% from June to August 2022, while automotive rose by 29.3% from July to September 2022, mechanical machinery grew by 0.8% from June to August 2022 and domestic use fell by 13.7% in the same period. As for the inputs demanded in steel production, oil fell by 0.9%, gas increased by 1% and energy by 0.4%, all data from June to August 2022.
Between January and August 2022, cumulative steel exports recorded an increase of 47.3%, totaling 7,740,700 mt. Exports increased by 10.7% in August compared to the previous month. Imports, meanwhile, suffered a reduction of 12.5% in the accumulated 8 months of 2022, compared to the same period of 2021, totaling 16,871,100 mt. In August, the figure was 25.4% higher than in July.
Production remains relatively stable, boosted by the significant volume of exports. The accumulation of the first 9 months of the year registered an important reduction of 4.1% in crude steel production, compared to the same period of the previous year, registering 46,862,500 mt. Finished steel presented a reduction of 3.7% in the same period, with 41,033,800 mt.