Latin America is one of the regions most affected by the COVID-19 pandemic, which resulted in a severe economic crisis. The countries in the region are offering tax incentives according to their conditions in order to reactivate their economies and restore at least part of the jobs lost. Despite some positive signs, there is a long road ahead to achieve normality again.
In this context of gradual recovery, the raw steel production numbers for Latin America in July maintained a tendency to improve, reaching 4.450 million tons (Mt), 20% more than in the previous month (June 2020). However, this total stayed 9% below the amount reported in July 2019.
The three main suppliers, Mexico, Brazil and Argentina, registered an increase of 700 thousand tons when compared to June. As for rolled products, long steel products showed an improvement of 17% and flat products 3%. On the other hand, the production of seamless tubes is still low, 26% less than in the previous month, and 69% less when compared to July 2019, due to the crisis suffered by the energy sector.
The Latin American trade balance during the second quarter fell 21% when compared to the first quarter of 2020, dropping from 15.641 Mt to 12.410 Mt. However, consumption increased 6% when compared to last month, reaching 4.368 Mt in June; but it was 16% lower than in the same month in 2019 (5,187 Mt).
Imports represented 39% of the consumption during the second quarter, against 36% in the previous quarter. This is one of the main risks that the Latin American industry faces, especially considering that the products from China and other Asian countries arrive at unfair trading conditions. As such, Alacero reinforces its call to the local governments to rise to this challenge. According to a new study conducted by Alacero, these asymmetries represent danger to the supply chains and therefore jeopardize the future of Latin American industry, considering that about 60 jobs are lost for every US$ 1 million worth of imports of steel manufactured products.
source: Alacero |
