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Alacero - Santiago, Chile, February 24th, 2017. The figures of production, consumption and trade from 2016 closed with a downgrade, which is a picture from the Latin American steel industry. The finished steel consumption decreased 8% and the production of crude and finished steel fell 10% and 5% y-o-y., respectively, vs 2015. On the other hand, 2017 should be a year of recovery.
Meanwhile, regional steel imports represents 32% of Latin-American consumption, 2 points lower than in 2015 (34%). The trade balance of the region remains negative, despite that in 2016 the deficit in tons decreased 23% versus 2015.
Crude Steel. Latin America and the Caribbean produced 53.7 million tons (Mt) of crude steel in 2016, 10% below the volume recorded in 2015. Brazil is the main producer in the region with 53% of the regional production (30.2 Mt), but shows an annual contraction of 9%.
Finished steel. In the same period, Latin America produced 50.6 Mt of finished steel, 5% less than 2015. Brazil was the main producer (20.9 Mt), accounting for 41% of the Latin American output. Mexico came second with 18.7 Mt (37% share of regional output).
Finished steel consumption
During 2016, finished steel consumption in the region reached 61.9 Mt, down 8% vs 2015. Largest increases in consumption -in absolute and percentage terms- were record in Mexico (additional 649 thousand tons, an increase of 3%), Peru (196 thousand additional tons, up 7%) and Bolivia (45 thousand additional tons, up 8%).
Conversely, in Brazil finished steel consumption shrank by 3.1 Mt, down 14% vs 2015. While Argentina, Chile, Colombia and Ecuador recorded declines of 20%, 8%, 5% and 9%, respectively.
From Latin-American`s total steel consumption, 53% corresponds to flat products (32.7 Mt), 45% for long products (27.8 Mt) and 1% to seamless tubes (732 thousand tons).
Imports. In 2016, Latin America imported 19.8 Mt of finished steel, down 14% vs 2015 (23.1 Mt). Of this total, 65% corresponds to flat products (12.9 Mt), 33% for long products (6.5 Mt) and 2% to seamless tubes (446 thousand tons).
Currently, imports represent 32% of the regional finished steel consumption, which brings about disincentives to the local industry, trade frictions, and threatens jobs.
Exports. Latin American exports of finished steel reached 8.7 Mt, same level that 2015 (8.7 Mt). Of this total, 49% are flat products (4.3 Mt), 41% for long products (3.6 Mt) and 10% to seamless tubes (884 thousand tons).
Trade deficit. In 2016, the region recorded a trade deficit of 11.1 Mt of finished steel. This imbalance is 23% lower than the one observed in 2015 (14.4 Mt).
In the same months, Brazil was the only country to maintain a trade surplus of finished steel, 3.3 Mt. The largest deficit was recorded in Mexico (-4.7 Mt), followed by Colombia (-2.3 Mt), Peru (-1.5 Mt) and Chile (-1.5 Mt).
The evolution of trade flows and the balance are show in Figure 02.
Production January 2017 - Advance Information
Advance information for January 2017, indicates that crude steel production reached 5.0 Mt, 12% more than December 2016 and 8% more than January 2016.
Meanwhile, the production of finished steel closed at 4.2 Mt in January 2017, 12% more than December 2016 and 3% more than January 2017.
Crude steel: Steel in its most basic form, coming from the continuous casting process, (slap, billet etc.). To obtain the qualities necessary for usage, this kind of steel needs to pass posterior processes, like rolling etc.
Finished steel: Refers to steel included in one of these 3 groups: Long products (e.g.: reinforcing bars, bars, wire rod, light sections, heavy sections, rails), flat steel (e.g.: sheets and coils, coated sheets, prepainted, stainless steel, chrome-plate sheets, hot dip galvanized sheet etc.) and seamless tubes.
Ton: A unit of weight or volume of sea cargo, equal to a metric ton (1,000 kg).
Alacero -the Latin American Steel Association- is the organization that brings together the Steel Value Chain of Latin America to promote the values of regional integration, technological innovation, corporate responsibility, excellence in human resources, safe working environments, and social and environmental sustainability. Founded in 1959, Alacero is formed by 49 companies in 12 countries, whose production -of about 70 million annual tons- represents 95% of the steel manufactured in the region. Alacero is a Special Consulting Organization to the United Nations and is recognized as International Non-Government Organization by the Republic of Chile, host country of Alacero´s headquarters.
(56-2) 2233-0545, ext. 23