According to data released by the Latin American Steel Association (Alacero), in the January-September period this year Latin American crude steel production totaled 49.67 million mt, decreasing by 7.4 percent year on year. In the same period, the region’s finished steel production totaled 41.23 million mt, down by seven percent year on year.
In September, Latin American crude steel production fell by 16 percent year on year to 4.69 million mt, the worst indicator in 33 months since December 2016 when output totaled 4.65 million mt, while its finished steel production decreased by eight percent year on year to 4.18 million mt. “Amid the political and economic crises that have been impacting domestic markets and external competitiveness, the regional trade deficit widened in September,” commented the association.
According to the association, the low production was driven by the increase in iron ore costs, which impacted companies’ margins. With the rising raw material costs and lower steel prices, some producers had to decrease their production. Lower production results were also driven by the shutdown of three major blast furnaces in Brazil, which is the largest steel producer in Latin America.
Meanwhile, the region’s finished steel consumption in the first eight months totaled 45.64 million mt, down by 4.8 percent year on year, according to Alacero.
“The external factors that impacted the Latin American steel market numbers at the beginning of the year are giving rise to internal pressures. As part of the economic stagnation in the face of trade wars and internal conflicts, increased consumption - resulting from stagnation in production, falling exports and rising imports - points to a domestic market lacking infrastructure and competitiveness. In this context, the increase in the regional trade deficit indicates that Latin America is becoming an important consumer for foreign markets that take advantage of this fragility,” said Francisco Leal, general director of Alacero.