Latin American steel output recovers in November led by Brazil   

Tuesday, 12 January 2021 14:55:24 (GMT+3)   |   Istanbul
       

According to Alacero, the Latin American steel association, the steel industry has been fundamental for the recovery of Latin America in the context of the pandemic, showing flexibility in its operation and focused on meeting local demand. In November last year, Latin American crude steel production totaled 5.29 million mt. The given month was recorded as the best month in 2020 in all countries in the region, with special emphasis on Brazil, which led the resumption. In the given month, the regional crude steel production from blast furnaces reached 2.76 million mt, increasing by 8.4 percent compared to October, boosted by the restart of equipment in Brazil, while the crude steel production from electric arc furnaces amounted to 2.53 million mt, remaining stable month on month.  

In the same month, Latin American seamless tubes output totaled 82,100 mt, up by 9.7 percent month on month, driven by the increase in activity in the oil and gas sector.

According to Alacero’s statement, the Latin American steel industry is focused on meeting local demand. In October, Latin American countries’ steel exports totaled 586,000 mt, decreasing by 30.3 percent year on year, while the countries’ steel imports increased by 10.8 percent compared to September. The share of steel imports in consumption was 28 percent in October. The accumulated deficit in the January-October period was 17.2 percent lower than that recorded in the same period in 2019, a significant decrease, with regional consumption being able to grow again with the steel trade deficit under control. In October, the apparent consumption of rolled products in the region was 5.40 million mt, the best for the year.

Alacero stated that China continues to be an important reference in the current steel industry juncture due to its relative weight in production, demand and trade of raw materials. According to worldsteel, China’s steel production grew by eight percent year on year in November and by 5.5 percent in the January-October period last year, compared to the same period in 2019. China’s rising iron ore imports, especially from Brazil, increased input prices.

Alacero noted that growing Chinese investment in Latin American countries is an issue of concern. “This process causes a greater dependency that can become a risk factor due to their business practices, state-owned companies, deindustrialization and job losses. The phase of regionalization and the disintegration of value chains in the world, accentuated by the trade war between China and the United States, opens an opportunity for the countries of the region to attract companies that seek to relocate affected by this phenomenon. To achieve this, Latin America needs to create conditions, such as access to technology, infrastructure, administrative simplification, quality technical education, institutional certainty and respect for the rule of law,” Francisco Leal, Alacero’s general director, said.


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