Steel Production Crucial for Latin America's Recovery
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Steel Production Crucial for Latin America's Recovery

Latin American Steel Association Alacero announced that the steel industry has been fundamental to the recovery of Latin America in the context of the

Latin American Steel Association Alacero announced that the steel industry has been fundamental to the recovery of Latin America in the context of the pandemic, showing flexibility in its operation and focused on meeting local demand. The production of crude steel totalled 5.294 million tonne in November, the best month in 2020. This happened in almost all countries in the region, with special emphasis on Brazil, which led the resumption. During the period, Blast Furnace production grew 8.4% compared to October, reaching 2.766 million tonne with a restart of equipment in Brazil, while Electric Furnace production remained stable, reaching 2.528 million tonne. In terms of rolled products, the production of seamless tubes reached 82.1 thousand tons in November, an increase of 9.7% compared to the previous month, driven by the increase in activity in the oil and gas sector.

The industry is focused on meeting local demand, as shown by the 30.3% year-on-year drop in exports in October, which totalled 0.586 million tonne. In the month, imports registered a 10.8% increase over September; its share in consumption was 28% in October, below the level of 34% between January and September 2020. The accumulated deficit between January and October was 17.2% lower than that recorded in the same period in 2019, a significant decrease so that regional consumption can grow again with the trade deficit under control. Apparent consumption of rolled products was 5.404 million tonne, the best for the year.

China continues to be an important reference in the current steel industry juncture due to its relative weight in production, demand and trade of raw materials. But it is also an issue of concern for its growing Chinese investment in Latin American countries, which according to Bloomberg, was USD 7.7 billion in 2020 more than in Europe and North America combined. Alacero's General Director Francisco Leal said "This process causes a greater dependency that can become a risk factor due to their business practices, state-owned companies, deindustrialization and job losses. The phase of regionalization and the disintegration of value chains in the world, accentuated by the trade war between China and the United States, open an opportunity for the countries of the region to attract companies that seek to relocate affected by this phenomenon. To achieve this, Latin America needs to create conditions, such as access to technology, infrastructure, administrative simplification, quality technical education, institutional certainty and respect for the rule of law.”

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