Crude steel production in Latin America fell 34% year on year in April

In June 12th, the novel coronavirus pneumonia affected the crude steel output in Latin America to 3 million 550 thousand tons in April, down 34% from a year ago, Alacero said. From January to April, crude steel production in Latin America was 18.3 million tons, down 14% year on year.

Alacero said the decline in crude steel production was a reflection of low demand and the disruption of steel companies' operations. In April, the crude steel output of Latin America using long process steelmaking process was 3.56 million tons, down 22% from March, the first month on month drop since 2009. In April, steel production in Latin America fell 32% year on year to 2.9 million tons.

In April, the novel coronavirus pneumonia epidemic began to spread. The most affected were Argentina and Brazil. Compared with April 2019, the steel production of the two countries decreased by 73% and 37% respectively year on year. In order to balance supply and demand, some factories in the region have shut down blast furnaces. According to Alacero, in April and may, seven blast furnaces in Latin America were shut down, affecting a total output of about 7 million tons. By the end of April, the utilization rate of steel capacity in Latin America was 42%, of which 43% was in Brazil and 60% in Mexico.

"The recovery in Latin America will vary from country to country, and the region is likely to be one of the last to return to normal economic activity." Francisco Leal, head of Alacero, said that the steel industry is a capital intensive and high fixed cost industry, which needs to achieve modernization and efficiency with a capacity utilization rate of about 80%. Alacero estimates that the current situation may continue into the third quarter.