Cuban steel industry not immune to global crisis

Even though Cuba’s economy is somewhat isolated from the world, local officials say that its steel industry has been impacted adversely by a number of global forces, including the United States.

On Tuesday Cuban Vice Minister of the Steel Industry, Guillermo García, said during a steel-related conference in Havana that the global crisis has caused the fluctuation of oil prices, along with reduced steel demand from Cuba's export markets, and has thus negatively affected Cuba's steel industry. In addition, local steel prices and demand have been dropping.

Mr. García further explained that in the last year, Cuba’s main steel export markets, such as Turkey, CIS and other Latin American countries, have decreased their billet purchase prices from roughly US$1,250 to US$400, and that rebar prices have dropped all the way to US$500/mt in some markets.

Moreover, the director of the event, Irene Rodríguez Pineda, said that the US trade embargo against Cuba, in place since the 1960s, has caused Cuba’s steel industry US$3.8 billion in losses from the beginning of 2008 through the first quarter of 2009. She also pointed out that the lack of financing from US banks to Cuba’s firms affects them harshly as they can only obtain costly loans to finance their operations.

Despite the adverse circumstances, Mr. García said that Cuba’s steel industry rendered positive results in 2008 through its two steel companies, Antillana de Acero and Acinox Tunas. Both companies saw an increase in their exports from 2007 and saw a 30 percent increase in their revenues from the Caribbean and Central American markets. He believes that the future of the market for this year lies in China’s performance and the overall recuperation in the world markets and that a sustained recuperation will occur by the second half of 2010.