The steel industry in Latin America cuts production

World consumption has reduced the utilization of production facilities in the US to 54%, in the CIS and the Middle East – 55%.

Steel production, like other industries in the Latin American region, was affected by the economic crisis caused by Covid-19, which fell 34% compared to the same month last year.

The decline reflects generalized weak demand and interruptions in operations in response to the effects of the slowdown. This situation is expected to continue until the third quarter and become the norm for the industry in the short term.

Global production declined 13.5% in April 2020 compared to April 2019, while production in China rose 0.2% over the same period. Compared to March 2020, global production fell by 7%, while in China it grew by 8%. In contrast to Latin America, China has resumed its growth following the lifting of quarantines and significant economic stimulus. “The risk is that China, which has begun its recovery, will seek to allocate its surplus through exports, as it did, creating more damage to Latin American industry and delaying or limiting its recovery, which will become necessary in the coming months.” – warns Francisco Leal, CEO of Alacero.

By comparison, Latin America produced 3.55 million tonnes of steel in April, a 34% decrease from the same month last year and a 14% year-on-year decrease to 18.3 million tonnes. In April, crude steel production via the BOF route decreased by 22% compared to March (3.56 million tons), which has not been the case since 2009.

For the production of rolled metal products, the decline is 32% compared to the same month last year, but this year it is 10%. In April, the effects of the pandemic began to spread; however, the impact was felt mainly in Argentina and Brazil, with declines of 73% and 37%, respectively, compared to April 2019. Rolled stock for Latin America is -2.9 million tonnes, which has not been the case since January 2009. In March, the apparent consumption of steel decreased by 9% compared to the same month of the previous year, and since the beginning of the year, the decline was 4%. The new consumption forecast for this year is a decrease of 16.5% (54 million tons).

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