LatAm Crude Steel Output Recouped After Covid-19 Crisis

SEATTLE (Scrap Monster): Amidst difficulties in facing with the spread of the Covid-19 pandemic, the Latin American steel industry is seen entering a transition stage, said the latest report published by the Latin American Steel Association (Alacero).

The impact of the crisis was quite evident from the region’s steel consumption, which recorded 30% decline in the month of April this year, compared with the same month a year before. The largest drop was recorded in Argentina, where steel consumption nosedived by 83% in comparison with April 2019.

However, the regional crude steel production by the region recorded 8% rise in May, compared with the prior month. The recovery was led by Brazil. It must be noted that the production stood 29% lower upon comparison with May last year.

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The gradual recovery in production indicates that the region’s steel industry is entering a transition stage, though the short term direction of it is still not clear. This is because some negative signs still hold amidst the positive ones. Incidentally, the world steel demand is projected to dip by 6.4% this year, due to global economic contractions.

According to Alacero, imports had accounted for 35% of regional steel consumption in Q1 this year, whereas it increased to 41% in April. Meantime, local production as a percentage of consumption dropped from 81% in Q1 2020 to 74% in April this year. The above data suggests that production was substituted for imports during the crisis condition.