Figures for the first ten months of 2014 continue to show that the Latin American steel market is not growing, in line with the regional and global economic deceleration. Regional crude steel production remains in line with same period of 2013 while finished steel production decreased 1%. Meanwhile, consumption –increasingly supplied by imports- grew only 1%.
Finished steel imports currently account for 33% of the Latin American consumption and regional trade balance continues to deteriorate. In Jan/Oct 2014 deficit (in tons) deepened 14% vs the same months of 2013.
Finished steel consumption
During January-October 2014, Latin American consumption of finished steel reached 58.3 million tons, up 1% vs same period of 2013. The largest increases in consumption -both in volume and percentage terms- were recorded in Mexico (+2.3 million additional tons, increase of 14%), Peru (560,000 tons, +24%), Colombia (452,000 tons, + 15%) and the Dominican Republic (94,000 tons, + 30%).
Conversely, Venezuela showed a strong contraction in consumption (-41%). Steel use also decreased in Ecuador and Chile (-16% and -8%, respectively).
In Brazil, consumption of finished steel decreased -6% in the first ten months of 2014, 1.4 million tons less than during the same period of 2013. This decline got more pronounced in recent months.
Trade balance
In Jan/Oct 2014, Latin America imported 19.1 million tons of finished steel, 7% more than the volume received in the same period of 2013 (17.9 million). Currently, finished steel
imports account for 33% of the regional consumption, which brings about disincentives
to the local industry, trade frictions and job losses. At the beginning of this decade (Jan/Oct 2010) the share of imports was 24%.
Meanwhile, Latin American exports of finished steel reached 6.8 million tons, down 4% vs the first 10 months of 2013. Between Jan/Oct 2014, the region accumulated a trade deficit
of -12.3 million tons. This imbalance is 14% deeper than that observed in the same period of 2013 (-10.8 million tons).
In Jan/Oct 2014, all countries in Latin America and the Caribbean showed deficits in their trade of finished steel. The largest one can be observed in Mexico (-4 million tons) and is followed by Colombia (-2 million tons), Peru (-1.7 million tons) and Chile (-1.2 million tons).
Production
In the first ten months of 2014, Latin America and the Caribbean produced 55.1 million tons of crude steel, in line with Jan/Oct 2013. Brazil accounted for 52% of the regional output (28.6 million tons), although showed a slight drop of 1% y-o-y.
In percentage terms, the strongest increases in production during the period were observed in Ecuador (+19%), Argentina (+ 7%), Mexico (+ 6%) and Peru (+ 4%). Venezuela and Chile, on the other hand, registered declines of -39% and -17%, respectively.
In Jan/Oct 2014, Latin America produced 47 million tons of finished steel, dropping -1% y-o-y. Brazil was the largest producer (21 million tons), 45% of the Latin American output. Mexico was second (14.6 million tons), 31% of regional production.
At growth rates of 11% and 10% respectively, Colombia and Mexico were the countries that showed the greater increases in finished steel production vs the first 10 months of 2013. Meanwhile, Venezuela and Chile fell -38% and -22%, respectively.
Advance information for November 2014 indicates that crude steel production reached 5.7 million tons in this month, 8% more than Nov 2013. Production of finished steel closed at 4.9 million tons, down 5% y-oy. Between January and November 2014, the accumulated crude steel production reached 60.8 million tons, 1% more than same months of 2013, while production of finished products reached 51.8 million tons, Jan/Nov 2013.
Source: Latin American Steel Association