Latin American steel output rebounds to prepandemic level

November 2020 steel output in several Central and South American nations has surpassed November 2019 figures, including in Mexico and Brazil, the region’s two largest steel producers.

According to figures from 64 nations assembled by the Brussels-based World Steel Association (Worldsteel), Brazil produced 3 million metric tons of crude steel in November 2020, up 11.2 per compared with November 2019.

Mexico’s rebound has not been as sharp, but an infrastructure spending program helped the nation produce 1.45 million metric tons in November 2020, up 1.7 percent compared with November 2019.

Brazil’s output boost helped South America as a continent produce more than 3.65 million metric tons of steel in November 2020, representing an 8.3 percent rise over November 2019.

The ramping back up of steel production in nations including Brazil, Peru and Ecuador, and subsequent scrap demand, has been a contributing factor to rebounding ferrous scrap prices in the United States and the rest of the world.

The late year resurgence is needed to help steel producers in Latin America try to catch up with production and revenue levels from the year before. Year-to-date figures in every Latin American nation other than Chile show a reduction in steel output. (Chile experienced a 2.6 rise in steel output in the first 11 months of 2020 compared with the same period in 2019.)

A combination of economic conditions and steel company decisions combined to cause Argentina to produce 24.4 percent less steel in the first 11 months of 2020 compared with 2019.

Despite the recent better health of the steel sector in Mexico and Brazil, those nations have remained behind their overall 2019 pace. Brazil’s output was down by 6.7 percent in the first 11 months of 2020, while Mexico’s shrank by 10.6 percent. By comparison, steel output in the United States fell 17.9 percent in the first 11 months of 2019 compared with the same timeframe in 2019.

What remains of Venezuela’s steel industry has shrunk yet more in 2020. In the first 11 months of the year, Venezuelan mills and foundries produced 26,000 metric tons of steel, down 47.7 percent from the 50,000 metric tons of output in the first 11 months of 2019.