Steel demand in Latin America recovers in first quarter

The production of steel lin Latin America reached 13 thousand 468 tons in the first quarter of the year, which represents its highest level since 2019, driven by a recovery in demand, even when the risk of increased imports persists, said the Latin American Steel Association.

Rolled steel production in the first quarter showed an increase of 6 percent, compared to the same period last year and 4.1 percent higher than the level of the same period of 2019.

Alacero reported that they are the best production levels reached since April 2018, when there was no pandemic; The construction and manufacturing sectors of the three main Latin American economies, Mexico, Brazil and Argentina, are driving this growth in the region’s steel companies.

Steel imports in the region increased in February by 13.3 percent, compared to February and represented 35 percent of regional consumption, Francisco Leal, General Director of Alacero, pointed out that Import behavior must be monitored to prevent a sudden increase from affecting regional production.

Steel exports in February in Latin America observed a decrease at an annual rate of 22.9 percent, due to the recovery of local demand. “It is important to pay attention to the recovery of local production levels to supply demand, as this represents the fastest way to normalize the situation in the steel market,” added Leal.

Alacero’s expectation is that production will remain on a positive path as consumption consolidates at the regional levell and the trade deficit is under control in the second half of the year.

On the other hand, the problem of global steel production overcapacity continues and that Latin America is not part of that problem. According to the OECD Steel Committee “global crude steel production capacity increased by 38 thousand Mt in 2020, or 1.6 percent, despite extremely weak market conditions.

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