Steel consumption in Latin America is already 16% higher than before the pandemic
• The growth of consumption, production and employment in the steel chain in Latin America is consolidated.
• May registered the best level of extra regional exports since October 2020.
• Latin America was the second region in the world with the highest growth in crude steel production in the first half, up 24.3% (14.4% in the world).
Alacero - São Paulo, Brasil, August, 2021. Consumption of rolled steel accumulated from January to May was 34.6% higher than in the same period in 2020 (a time of decline with the onset of the pandemic) and 15.8% higher than in the same months in 2019. This was possible thanks to the good performance of sectors of the steel value chain, such as construction and automotive production.
The impact was positive across the region. In the first five months of the year, the accumulated growth of steel consumption in relation to the low base of 2020 was 101.3% in Argentina, 65.2% in Peru, 50.7% in Brazil, 39.6% in Colombia, 25.8% in Chile and 14.5% in Mexico.
Furthermore, the development of the chain had an important effect on the generation of new jobs. According to the CBIC, the construction sector generated more than 178,000 jobs in the first half of 2021 in Brazil. According to Indec, in Argentina the synthetic indicator of construction activity (ISAC) accumulates in the first five months of the year a growth of 70.9% compared to the same period in 2020.
In turn, the production of rolled steel in June rose 56.5% compared to the same month in 2020. With regard to intermonth production, it suffered a drop of 2.8% from May to June, mainly due to the reduction in production in Brazil and Mexico. In addition, there was a regional decrease of 7.8% in flat steel production.
The second quarter ended with the production of finished steel 62.1% above the same period in 2020 and 6.9% higher than in the first quarter of the year.
Total exports of finished steel increased by 0.2% in May, from 588.6 thousand tons in April to 589.6 thousand tons.
This growth in exports, together with the 1.3% reduction in total imports, had a moderate effect on the decline in the May trade deficit, which fell by 1.7% compared to April. Stabilizing the trade balance deficit remains a major challenge for productive development and for the level of employment in Latin America. In May, extra-regional imports accounted for 36% of steel consumption and the month reached a historic record with 93% of the foreign market share of total imports.
Crude steel production during the first half of the year showed a favorable performance, as production in Latin America was 24.3% higher than in 2020 and 1.7% higher than in 2019. According to the World Steel Association, America Latina was the second region with the highest production growth in the world during this period.
“The consolidation of increased steel consumption, even at pre-pandemic levels, is great news for the region. This means that the Latin American economy and the sectors that demand steel are in a continuous recovery, which stimulates the creation of hundreds of thousands of jobs in the value chain”, said Alejandro Wagner, CEO of Alacero. “Companies, governments and officials need to continue working to stabilize the trade deficit and to understand the direction of the steel world in terms of tariffs and environmental regulations. We have an innovative, productive and efficient steel industry, which allows and obliges us to be protagonists in discussions on these relevant topics”. ••
Alacero – Latin American Steel Association (Asociación Latinoamericana del Acero) - is the non-profit civil entity that brings together the Latin American steel value chain to promote the values of regional integration, technological innovation, excellence in human resources, safety at work, corporate responsibility and socio-environmental sustainability. Founded in 1959, it is made up of more than 60 producing and related companies whose production is close to 60 million tons per year. The United Nations recognizes Alacero as a Special Consulting Agency.
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