Steel consumption falls in Latin America facing the pandemic

Posted on 10 April 2020
 

Source: Alacero

Figures for the steel industry are expected to continue to decline in the new scenario of the health crisis and its economic effects. February results of crude steel production show a 6% reduction compared to the same month of 2019, 4.8 million tons (Mt). At 3.4 Mt, rolled steel production was 2% lower than the result seen in February last year.

In the accumulated result, the three main producing countries in the region presented decreases: Mexico (-15%), Argentina (-7%) and Brazil (-6%). In comparison with February last year, Mexico (-17%) and Brazil (-1%) declined, with Argentina seeing an increase of 8%. Steel imports in January advanced 0.1% in relation to the same month of 2019. Exports showed a 20% cut in relation to January of last year, although they were 9% higher than the result of December 2019 (728 thousand t).

This performance indicates the continuation of the effects derived from the low economic activity observed since the end of 2019, which has discouraged the demand for steel, an essential material for many other industries. Analysts and international institutions agree that 2020 will be a tough year of with the combination of the effect of the decrease in economic activity due to the general confinement imposed in the coronavirus response and the drop-in oil prices.

Given Latin America’s high dependence on oil, commodities, and global economic performance, the region may face a complex scenario. In this scenario, to adapt the production to the market demand, the steel sector has also reacted by decreasing the activity; there are already some blast furnaces at lower capacity due to this contingency.

Health and Safety
In Latin America the steel industry has adopted all the measures for a safe operation and care of people. They have also adopted social aid measures such as donations, construction of field hospitals, among others.

“In the midst of the advancement of this health contingency in Latin America, our industry has been collaborating greatly in this entire process of strengthen the health systems: supplying steel for the construction of a new COVID-19 treatment center, building a community hospital and providing extraordinary funds to support communities where are the plants. Everyone is united against this fight”, said Francisco Leal, General Director of Alacero. “Steel participates in an enormous number of value chains that are essential, such as transportation, oxygen supply, infrastructure, storage of food and disinfectant products, white goods and many others.”, completed Leal. 



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