Latin American steel usage reflects economic recovery, to continue in Q1

Thursday, 11 February 2021 15:37:09 (GMT+3)   |   Istanbul

According to Alacero, the Latin American steel association, Latin America continues to show signs of economic recovery, although performance is uneven across countries in the region. The goal of the Latin American steel industry is to continue to meet the demand in each country, Alacero said.

In 2020, Latin American crude steel production totaled 55.6 million mt, decreasing by 8.4 percent compared to 2019. Chile recorded the best performance producing 1.2 million mt of crude steel, up by 2.1 percent, followed by Peru with 732,000 mt of crude steel, decreasing by 40.6 percent, both year on year.

In the given year, Latin American rolled product output totaled 46.3 million mt, decreasing by 9.7 percent. Argentina’s rolled product output was 3.5 million mt, down by 18.8 percent, while Mexico and Brazil produced 15.8 million mt and 21.7 million mt of rolled products, respectively.  

In November last year, Latin American steel consumption totaled 5.5 million mt, up by six percent year on year, reflecting the economic recovery in the region at the end of the year. Alacero estimates that this performance may be maintained during the first quarter of 2021. In the given month, the share of imports in consumption fell and it is expected that regional consumption will grow again, with the trade deficit under control.

Meanwhile, new research carried out by Professor Dr. Germano Mendes de Paula, warns about the risks of competitive differences in Argentina, Brazil, Colombia, and Mexico with countries in Asia such as South Korea, India, Vietnam and, especially, China. It also draws attention to the risk this represents for the metal-mechanic value chain of the steel industry in Latin America. According to Alacero, the research document shows how these differences in competitiveness variables such as taxation, education, logistics and financing are undermining the future of the steel industry in the region. In this context of great competitive asymmetries, the defense of the metal-mechanical chain and the steel industry in Latin America is essential to maintain activities that have high levels of linkage and generation of high-quality jobs.

“In 2019, according to information provided by the aforementioned research on the impact of direct and indirect steel imports from China, the continued loss of jobs in the Latin American metal-mechanic chain due to deindustrialization is a topic that we must consider critical. Alacero calls for strengthening economic recovery by promoting private and foreign investment, reducing country costs in aspects such as taxes and logistics, stimulating infrastructure and strengthening the metal-mechanical value chain, which should reduce competitive asymmetries existing,” Francisco Leal, general director of Alacero, said.

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