Steel output rises in Latin America

The São Paulo-based Asociación Latinoamericana del Acero (Alacero) says the sustained consumption of steel in the region led to strong steel production growth in the first quarter of this year. Rolled steel production and demand each increased 17 percent compared to the first quarter of 2020, returning to pre-COVID-19 pandemic levels, the group says.

Steel consumption in the region grew for the third consecutive quarter, driven mainly by the construction and manufacturing sectors, with uniformly strong economic performances in Mexico, Brazil and Argentina.

“Demand continues to recover,” says Alejandro Wagner, executive director of Alacero. “These data are encouraging, although unevenly by country and sector. In addition, we must continue to pay attention to extrazone [outside Central and South America] imports, which represent a risk and displacement of production in our region.”

Wagner continues, “In March, imports rose 27 percent compared to the same month in 2020, half coming from China. The recovery of the steel industry and its value chain is very important for Latin America, which was a region very economically affected by the COVID-19 pandemic. The sector generates 1.2 million qualified and qualified jobs in the region, and they must be preserved. For this recovery to be maintained over time, public policies that favor national and foreign private investments, stimulate economic recovery, lead to a reduction in the tax burden and an increase in productivity are needed.”

 First-quarter 2021 output of 18.4 million tons of steel in the region represents a 17 percent increase compared with the first quarter of 2020 and 5.5 percent growth compared with the same period in 2019.

In the first quarter of 2021, 6.4 million tons of steel were imported into Central and South America, 15 percent more than in the first three months of 2020 and 9 percent more than in the first quarter of 2019. In March, 52 percent of those imports came from China, reaching levels exceeding those recorded in January (30 percent) and February (33 percent), Alacero says.

Some 1.8 million tons were exported from the region in the first quarter of 2021, 17 percent less than in the first three months of 2020. This led to an increase in the steel trade deficit, which in the first quarter of 2021 was 36 percent higher than in 2020, according to the association.

Investments are being made to boost steel output in Latin America, including in the scrap-fed electric arc furnace (EAF) sector, including a mill expansion in Colombia; the restart of another EAF mill in Brazil; and equipment investments by Peruvian steelmaker Aceros Arequipa.