Alejandro Wagner, executive director of Alacero
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Alejandro Wagner, executive director of Alacero

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According to data from Alacero, the slowdown will spread throughout Latin America, adding the external challenges of the global situation, such as the energy crisis in Europe and the war in Ukraine, to local challenges, such as inflation. The growth forecast for 2023 is low, even higher than expected in China and the US, the region’s main trading partners.

What will be the most demanding sectors of steel?

Of the sectors demanding steel in Latin America, construction had a drop of 1.8% from June to August 2022, while the automotive industry had an increase of 29.3% from July to September of the same year, mechanical machinery it grew 0.8% from June to August 2022 and home use fell 13.7% in the same period. Regarding the inputs demanded in steel production, oil fell 0.9%, gas increased 1% and energy 0.4%, all data from June to August 2022.

How much did steel exports reach?

Regarding the performance of the sector between January and August 2022, accumulated steel exports registered an increase of 47.3%, totaling 7,740.7 thousand tons. Thus, exports increased by 10.7% in August compared to the previous month. Imports, for their part, suffered a reduction of 12.5% ​​in the accumulated 8 months of 2022, compared to the same period of 2021, totaling 16,871.1 thousand tons. In August, the figure was 25.4% higher than in July.

What is the level of steel production?

Production remains relatively stable, driven by the significant volume of exports. The accumulated figure for the first 9 months of the year registered a significant reduction of 4.1% in crude steel production, compared to the same period of the previous year, registering 46,862.5 thousand tons. Rolled steel presented a reduction of 3.7% in the same period, with 41,033.8 thousand tons.

What is the steel scenario in Argentina?

Data from Alacero indicate that, in 2021, Argentina had a growth of 10.4%, for 2022 the expectation is 4.5% and for 2023, 0.2%. Of the steel-demanding sectors in Argentina, construction increased 6.6% from June to August 2022, while automotive increased 32% from June to September of the same year, mechanical machinery grew 18.5% from June to August 2022 and home use fell 19.3% in the same period. Regarding the inputs demanded in steel production, oil increased by 12.7%, gas by 7.5% and energy by -3.6%, all data from June to August 2022.

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Steel consumption grows due to the performance of Argentina, Colombia, Mexico and Brazil.

Steel consumption grows due to the performance of Argentina, Colombia, Mexico and Brazil.

Argentine News

Regarding the country’s medium-term trends, in the building, the lower dynamism of public works and the little activity of the private sector, I would expect to have a political and economic vision with greater security to start new works. In the sector automotivethe Law to encourage investment in the auto parts sector would give air to local production. The entity stressed that the problems to import would still be in placebut he stressed that a greater supply can lead to more affordable prices that boost sales.

According to Alacero, in mechanical machinery, there is growth without insurance, if the limitations of the sector are not regulated (obstacles to imports and high cost of financing). In addition to lower demand for agricultural machinery due to the low harvest and lower international prices of commodities.

Finally, in domestic usenew investments would make it possible to increase production, but the import of spare parts would also continue to be limited, in addition to the fact that demand will be conditioned by the presence of pro-consumer policies (taking into account that 2023 is an electoral year), financing programs and recovery of real wages.

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