LatAm Steel Output Hit by Near-Zero Market Demand

The region’s crude steel production totalled 3.55 million tonnes (Mt) in April this year.

SEATTLE (Scrap Monster): The steel production in the Latin American region was hampered by low demand situation on account of economic crisis due to the Covid-19 pandemic. The regional steel output registered a decline by 34% in April 2020, compared with the same month a year before. The situation is expected to become a new norm and continue until the third quarter of the year, said the Latin American Steel Association (Alacero).

The region’s crude steel production totalled 3.55 million tonnes (Mt) in April this year. The BOF steel production dropped by 22%- the highest level of decline since 2009. The production during the initial four months of the year totalled 18.3 Mt.

As part of efforts to match supply with demand, many steel mills in the region curtailed blast furnace operations starting in March. A combined capacity of approximately 7 million tonnes was idled during the months of April and May alone. As a result, the capacity utilization rate of steel mills dropped significantly to 42%, in line with the global decline in capacity utilization.

Alacero fears that the Latin American region would be one of the last regions to normalize its economic activity. The governments in the region should prioritize on implementing key strategies that would ensure a robust steel industry that provides high-end services to its customers.

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