Latin America’s steel production and consumption recover slowly

Tuesday, 15 September 2020 16:14:10 (GMT+3)   |   Istanbul
       

According to Alacero, the Latin American steel association, Latin American steel industry has shown signs of slow recovery in production and consumption. In July this year, Latin American crude steel production totaled 4.45 million mt, increasing by 20 percent compared to June and decreasing by 9 percent year on year. The consumption in June totaled 4.37 million mt, increasing by six percent compared to the previous month and decreasing by 16 percent compared to the same month in 2019. 

In the given month, long steel production increased by 17 percent, while flat steel production rose by three percent. Latin American seamless tube production in July decreased by 26 percent compared to June.

Imports represented 39 percent of the consumption during the second quarter. This figure is a significant risk for the Latin American steel industry, considering that the products from China and other Asian countries arrive at unfair trading conditions. Alacero called on government to take appropriate measures amid increasing unfair trade conditions, as SteelOrbis previously reported. According to Alacero, these unfair trade conditions represent danger to the supply chains and therefore jeopardize the future of Latin American industry.

The exports have maintained at 16 percent of production in the first half of this year. The increase of exports and decrease of imports between May and June in Mexico may be a positive sign regarding the market expectations related to the US’ recovery.   

The recovery of the construction sector contributed to the demand. In Brazil, the blast furnaces resumed operations after four months. In Mexico, the production value of the construction companies grew 2.4 percent in real terms in July compared to June. In Argentina, the construction sector shows signs of partial recovery as it relaxes the lockdown rules. In Colombia, measures are being taken to resume activities.

“July’s numbers indicate that the construction sector is recovering faster and that the investment in infrastructure is one of the drivers of economic recovery, considering that this is a sector that directly influences a large chain of other industries and jobs,”, Francisco Leal, Alacero’s general director, said.


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