Steel consumption and production drops in Latin America - Alacero
Latin American steel association Alacero said that although the steel market in the region showed a 5% drop in the consumption of finished steel comparing January 2019 and January 2018, the regional production of crude steel and finished steel fell by 1% and 5% in January, respectively, demonstrating global and regional economic uncertainties. Although the region has decreased its imports by 4%, the share of imports in regional consumption also fell: regional consumption is supplied of 27% by these imports against 36% in January 2018. For its part, the trade balance, still negative but showing signs of evolution. The deficit registered in January 2018 was 1.2 million tonne, reaching 4 thousand tons more than the previous year (1,176 Vs 1,181), however, it increased 11% comparing to December 2018 (-1.1 million tonne) .
In spite of the oscillations derived from the variation in consumption and market uncertainties, the steel production remained stable in January.
Crude steel - Latin America had a production of 5.28 million tonne of crude steel in January 2019, 1% lower than that registered in the same period of 2018 (5.32 million tonne). Brazil is the main producer with 56% of the regional total (2.9 million tonne), growing 2% comparing to January 2018.
Finished steel - The region produced 4.2 million tonne of finished steel, 5% less than in January 2018. The main producers are Brazil 1.8 million tonne (43% of the Latin American total) and Mexico with 1.6 million tonne (37% of the Latin American total).
Demand for steel falls in the period - Reflecting the infrastructure investment deficit in Latin America, the tightening of global financial conditions and the fall in commodity prices as a result of trade tensions between the USA and China, demand for steel starts timid in the year 2019. In the first month of the year, the region recorded a consumption of finished steel of 5.4 million tonne, 4% lower than in January of 2018 (5.6 million tonne). The main countries that increased their consumption both in absolute terms and in percentage terms were Colombia (42 thousand additional tons and 15%), Guatemala (19 thousand tons and 27%) and Peru (15 thousand tons and 6%). Compared with the same period, the countries that stood out in consumption were: Mexico with 2.2 million tonne (reduction of 2%), Brazil with 1.5 million tonne (reducing 6%), Argentina with 0.3 million tonne (lowering 25 %), Colombia with 0.3 million tonne (up 15%) and Peru with 0.3 million tonne (up 6%). 57% of Latin American onsumption corresponds to flat products (3.1 million tonne), 42% to long products (2.2 million tonne) and 2% to seamless pipes (87 thousand t).
Imports - In January 2018, Latin America imported 1.9 million tonne of finished steel, 4% less than that imported in the same period of 2018 (2.0 million tonne). 70% correspond to flat products (1.4 million tonne), 26% to long products (508 thousand tons) and 3% to seamless pipes (61 thousand tons). Currently, imports of finished products corresponds for 27% of the region’s consumption, bringing with it disincentives to the local industry, trade frictions and puts sources of employment at risk.
Production shrinks in February
Early information from February 2019 indicates that crude steel production reached 5.0 million tonne, 5% lower than in January, and 4% higher than in February 2018. Cumulatively, in January-February 2019, production reached 10.3 million tonne, 2% less than in the period of January-February 2018 (10.5 million tonne). Finished steel production reached 3.9 million tonne, 7% lower than in January 2019, and 7% less than in February 2018. Cumulatively, from January to February 2019, finished steel production reached 8.1 million tonne, 7% less than in the same period of 2018 (8.8 million tonne).
Source : Strategic Research Institute