16/02/2012 - Alacero

Latin American steel market until January 2012*

The apparent steel use of finished steel in Latin America reached a volume of 61.9 million tons in 2011, 2.2% more than in 2010.

The Latin American crude steel production had a volume of 68.1 million tons in 2011, an expansion of 11% comparing with 2011.

In January 2012, the volume was of 5.5 million tons, 2.1% higher than in the same month of last year.

Brazil was responsible of 51% of the regional crude production in January, with a volume of 28 million tons, meaning 1% more than in January 2011.

Mexico produced 1.6 million tons, a growth of 4% comparing with the same month in 2011.

The finished steel use in the region reached a volume of 4.9 million tons, against a finished steel production slightly lower, of 4.4 million tons in December 2011.

Taking this into account, Latin America in 2011 had a consumption of 61.9 million tons, 2.2% more than in 2010. This figure is lower than Alacero’s projections in September 2011, when an increase of 4.7% was expected, due to a drop of steel demand in Brazil.

In Brazil, the demand had a contraction of 3.4% in 2011, reaching a volume of 25.2 million tons against 26.1 million tons in 2010. Argentina and Mexico had a more dynamic market, with a demand increase of 8.7% and 6.3%, respectively.

The finished steel production in 2011 reached a volume of 54.4 million tons, below the consumption levels. This is due to a loss of regional competitiveness as a consequence of overvalued Latin American currencies and the impact of massive imports, which have slowed down the local production growth.

In January 2012, the finished steel production was 4.4 million tons, 1% more than in January 2011. There was a contraction of 30% in Argentina and 1% in Brazil, while Mexico produced a volume of 1.3 million tons, similar to the volume in January 2011.

Throughout 2011, the gap between imports and exports has deepened: in December 2011 1.5 million tons were imported, but only 630.900 tons were exported. 

For the whole year 2011, the regional deficit was of 8.8 million tons, explained mainly by an imbalance in Mexico. In this country, 5.8 million tons of steel were imported and only 3.3 million tons were exported.

Chile and Colombia had a deficit of 1.1 and 2.1 million tons respectively, being, with Mexico, the countries more unbalanced at trade level in the region.

Although Chile and Colombia are traditionally net importers, it is worth mentioning the growing presence of China as a trade partner, to the detriment of imports from other countries in Latin America.

*Note: All annual values are preliminary