Alacero projects a 2.4% increase in steel consumption in Latin America for 2023, contrasting with a 7.5% drop in local production. The rise is largely due to a surge in imports, particularly from China, challenging local suppliers amid global competitive pressures.
The Alacero Summit, a recent gathering of over 700 steel industry executives, focused on the future of steel in Latin America amidst challenging global market dynamics. Alacero, the Latin American Steel Association, provided a forecast indicating a growth in steel consumption across the region for the year 2023.
Despite the rise in consumption, local steel production is anticipated to decline. This paradoxical situation is driven by a growing reliance on imports, especially from regions outside of Latin America. In 2022, imports accounted for 31% of the market share, and this figure is expected to climb to 34% in 2023. These statistics highlight the dependence on external suppliers and underscore the competitive disadvantages faced by local producers.
The Alacero Summit underscored the risk of unfair trading practices, particularly from China, which remains the predominant source of steel imports in Latin America. The issue is so pressing that, in the first half of 2023, 63% of anti-dumping actions in Latin America were directed against Chinese imports.
Alejandro Wagner, the executive director of Alacero, stressed the environmental and economic consequences of this import reliance. Latin American steel is produced with a significantly lower carbon footprint compared to the global and Chinese averages. However, the market is increasingly dominated by Chinese steel, which not only undercuts local industry but also undermines environmental standards.
To combat these challenges, Latin American steel companies are actively working to reduce their carbon emissions, striving for a just and equitable transition in the industry. Latin America possesses abundant natural resources and a sophisticated industrial infrastructure that can drive progress, but it requires more economic and political stability, as well as modern tax and labor systems, to incentivize investment and competitiveness.
Alacero's analysis paints a complex picture for the Latin American steel industry, where increased consumption is met with a decline in local production due to a surge in imports. The situation calls for strategic measures to counter the influence of extra-regional imports and to support local production, which is crucial for economic growth and job creation. As the industry navigates this landscape, fostering an environment conducive to local investment and production will be key to sustaining its future.