The Latin American Steel association Alacero has highlighted that factors such as pandemic and war in Ukraine affected the sector in 2022 and inflationary pressures, currency restrictions and political uncertainties are challenges for 2023. Alacero said “Depreciation of Latin American currencies became the agenda as of May 2022. Linked to the appreciation of the dollar and the impacts of the conflict between Russia and Ukraine, there is a reduction in the price of raw materials in general. However, in parallel, the Latin American industry presents a scenario of a moderate drop in demand.”Alacero’s Mr Alejandro Wagner said “Political uncertainties are also potential obstacles, which could interfere with the implementation of the structural reforms needed in the region. In 2023, the level of attention is increasing around expectations of lower global growth and less favorable financial conditions. Thus, a slow normalization of frictions in post-pandemic production chains would boost production growth in steel-consuming sectors. Therefore, we reinforce that the biggest challenges in 2023 for Latin American markets are increased inflationary pressures, additional foreign exchange constraints and political uncertainties.”Mr Alejandro Wagner added “Another factor contributing to the sector’s performance was the cost of gasoline, which rose steadily throughout 2022, impacting public transportation, government budgets and agriculture. Crude oil prices rose further in late February in response to the Russian invasion and subsequent Western sanctions. “Higher energy prices put pressure on government budgets as politicians try to keep costs down by limiting price increases, cutting taxes or increasing subsidies. These policies have drawbacks, including diverting budgets from other social spending. In other words, rising energy prices have different impacts on countries in the region, depending on their energy trade balance position and their refining capacity and favorable domestic prices.”The region’s apparent consumption, which in 2021 was 74.9 million tonnes up25.8%, after the first 8 months of the previous year, pointed to an expected drop of 9.5%, and should close at 67.8 million tonnes in 2022. Therefore, the region should close 2022 with 105 kg per capita, equal to the 2018-2019 average.
The Latin American Steel association Alacero has highlighted that factors such as pandemic and war in Ukraine affected the sector in 2022 and inflationary pressures, currency restrictions and political uncertainties are challenges for 2023. Alacero said “Depreciation of Latin American currencies became the agenda as of May 2022. Linked to the appreciation of the dollar and the impacts of the conflict between Russia and Ukraine, there is a reduction in the price of raw materials in general. However, in parallel, the Latin American industry presents a scenario of a moderate drop in demand.”Alacero’s Mr Alejandro Wagner said “Political uncertainties are also potential obstacles, which could interfere with the implementation of the structural reforms needed in the region. In 2023, the level of attention is increasing around expectations of lower global growth and less favorable financial conditions. Thus, a slow normalization of frictions in post-pandemic production chains would boost production growth in steel-consuming sectors. Therefore, we reinforce that the biggest challenges in 2023 for Latin American markets are increased inflationary pressures, additional foreign exchange constraints and political uncertainties.”Mr Alejandro Wagner added “Another factor contributing to the sector’s performance was the cost of gasoline, which rose steadily throughout 2022, impacting public transportation, government budgets and agriculture. Crude oil prices rose further in late February in response to the Russian invasion and subsequent Western sanctions. “Higher energy prices put pressure on government budgets as politicians try to keep costs down by limiting price increases, cutting taxes or increasing subsidies. These policies have drawbacks, including diverting budgets from other social spending. In other words, rising energy prices have different impacts on countries in the region, depending on their energy trade balance position and their refining capacity and favorable domestic prices.”The region’s apparent consumption, which in 2021 was 74.9 million tonnes up25.8%, after the first 8 months of the previous year, pointed to an expected drop of 9.5%, and should close at 67.8 million tonnes in 2022. Therefore, the region should close 2022 with 105 kg per capita, equal to the 2018-2019 average.
