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Latin American steel industry foresees a positive scenario in 2019

Latin Americam steel association Alacero in March beginning announced that following the pace of the slowdown in the economy compared to global markets, the low consumption per capita and the barriers that deteriorate its iron and steel market, Latin America has suffered falls in its trade while maintaining a trend of improvement in the deficit of the trade balance. In the year of 2018, the consumption of finished steel fell 1% while the production of crude steel and finished steel rose by 3.4% and 1.6%, respectively, compared to 2017. It should be noted that it was positive that this increase gone to replace imports, whose annual share fell 3%. Earlier this year, in January, crude steel production grew 2.2% in the same comparison in 2017, reaching 5.4 million tons. Domestic consumption in 2018 was attended by 33.8% for imports, which decreased 9.7% compared to 2017. The trade balance remains negative, but the deficit in tons has fallen 11% compared to 2017.
Highlights of Latin America in 2018:

  • 65.1 million tonne crude steel production
  • 53.7 million tonne of rolled steel production
  • 67.0 million tonne of apparent steel consumption
  • 10% decreased imports of Latin American steel
  • 8% decreased exports of Latin American steel

Crude steel – Latin America and the Caribbean presented a production of 65.1 million tonnes, 3.4% more than in 2017. Brazil continues to be the main producer with a 53% share in the total produced in the region (34.7 million tonnes), a 1% increase in relation to 2017. Latin American crude steel production reached 5.4 million tonnes in January 2019, representing an increase of 2% compared to the same month last year.
Finished Steel – The region produced 53.7 million tonnes of finished steel, 2% higher than that achieved in 2017. Brazil is the main producer with 23.1 million tonnes, 43% of the Latin American total, a share that increased 3.2% compared to 2017. Mexico is still in second responding by 35%, with 19 million tonnes.
Consumption of finished steel – In 2018, the region recorded a 67 million tonnes consumption of finished steel, decreasing 1% vs 2017. The countries with the highest decreases are: Mexico, Peru and Costa Rica which registered falls of 3.2% (-0.9 million tonnes), 16.4% (-0.6 million tonnes), 11.2% (-0.1 million tonnes) respectively, not counting Venezuela where we do not have accuracy of the information. The main countries that increased their consumption, both in absolute terms and in percentage terms, were Brazil (1.4 additional million tonnes and 7.3%), Paraguay (0.12 million tonnes and 35.9%), and Colombia (0.1 million tonnes and 0.6). %). Of the Latin American total, 56.5% correspond to flat products (37.9 million tonnes), 42% to long products (28.0 million tonnes) and 1% to seamless tubes (1.0 million tonnes).
Imports – In the last year, Latin America imported 22.7 million tonnes of finished steel, 10% less than in 2017 (25.1 million tonnes). Of this total, 70% correspond to flat products (16.0 million tonnes), 27% to long products (6.1 million tonnes) and 3% to seamless pipes (0.6 million tonnes). In December 2018, imports of finished steel from the region increased by 9% compared to the same month of 2017, totaling 1.9 million tonnes. Currently, imports of finished products represent 34% of consumption in the region, however, we came from a 30% share in 2013 with a growth rate that until this year was interrupted by a decline. It is striking the quarterly chart showing again a trend in the 4th quarter of 2018 whererose to 36% coming from 34%. It is urgent to take care of this in our region since it brings with it disincentives for the local industry, commercial frictions and puts investments and jobs at risk.
Exports – Latin American exports of finished steel reached 9.8 million tonnes, 8% less than in 2017 (10.6 million tonnes). Of this total, 44% correspond to flat products (4.3 million tonnes), 42% to long products (4.1 million tonnes) and 14% to seamless tubes (1.3 million tonnes).
Source : STRATEGIC RESEARCH INSTITUTE, STEELGURU
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