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Latin America Shows Signs of Gradual Recovery in Steel Production & Consumption

Steel News - Published on Wed, 16 Sep 2020

Image Source: Latin America Steel COVID19
Latin American steel association Alacero announced that Latin America, which is one of the regions most affected by the COVID-19 pandemic, has continued with an improvement trend in Jul;y 2020, adding a total of 4,450 million tonnes, an increase of 20% compared to June 2020, but remained 9% below July last year. The three main producers, Mexico, Brazil and Argentina, registered an increase of 700 thousand tonnes compared to June. In terms of rolled products, long steel production grew 17% in the month, compared to 3% for flats. On the other hand, that of seamless tubes remains depressed, which experienced a decrease of 26% compared to the previous month, and 69% compared to July last year, as a consequence of the crisis in the energy sector.

The Latin American trade balance during the second quarter suffered a decrease of 21% compared to the first three months of 2020, going from 15,641 million tonnes to 12,410 million tonnes. For its part, consumption grew by 6% compared to the previous month and it reached 4,368 million tonnes in June; but it was 16% lower than the same month of 2019 at 5,187 million tonnes.

Imports represented 39% of consumption during the second quarter, surpassing the 36% of the previous quarter. This being one of the main risks faced by Latin American industry, especially considering that the percentage coming from China and Asian countries arrives in unfair trade conditions, Alacero reiterates his call to the governments of the region to face this challenge. According to a new study by Alacero, these asymmetries represent a danger for supply chains and therefore compromise the future of the Latin American steel industry, since about 60 jobs are replaced for every US $ 1 million of imported metalworking products.

Exports have been maintained with 16% of production in the first six months of the year. The increase in exports and the fall in imports between May and June in Mexico may be positive signals about the expectations in the market related to the US recovery.

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Posted By : Yogender Pancholi on Wed, 16 Sep 2020
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