Steel Consumption in Latin America Continues to Improve
Latin American steel association Alacero announced that steel consumption in Latin America continues to grow due to the recovery in demand, the increase in the industrial production and manufacturing index and the rebuilding of inventories, both of final consumers and of the distribution chain. Steel consumption in January 2021 rose for the ninth consecutive month, 0.8% compared to the previous month, totalling 6.09 million tonnes, that is, 12.7% higher than that of January 2020; with which the level prior to the start of the Covid-19 pandemic is recovered. Alacero said “The short-term prospects look favourable for the strengthening of the demand for steel in the region. A few days ago, the International Monetary Fund released the April update of its economic forecasts for this year, indicating that the global economy will grow at 6%, developed countries at 5.1% and emerging economies at 6.7 % and Latin America at 4.6%. Brazil stands out in the region, with a rate of 3.7%, and Mexico, with 5%.”
Brazil was the country that contributed the most to the improvement in the performance of steel demand with an increase of 8.8%, the fifth consecutive month above 2 million tonnes per month, a level that had not occurred since June 2018. Argentina also registered a 10.8% increase in January consumption compared to December 2020.
Imports registered an increase of 5.7% compared to January 2020; On the other hand, exports for the month were reduced by 27.3% in relation to the same period last year, due to the fact that the industry is focusing on supplying the local market as a priority; This last result was 12.4% below December last year, and represented only 11.4% of regional production in January, below its share of 15.6% in 2020.
As a consequence of this performance, the trade balance had a worsening of the deficit, which had already been present in November and December. In January, imports represented 35% of regional consumption, compared to 33% observed during 2020.
The accumulated production of crude steel until February was 10.21 million tonnes, representing an increase of 3.9% compared to the same period in 2020. The accumulated production of rolled steel grew 3.4%, reaching 4.18 million tonnes in February, 2% more than the previous month.