Brazilian media BNAmericas reported that Latin American Steel Association (Alacero) recently estimated that Latin America’s steel output in 2013 will drop by 1% to 64.9 million tons; the main reason was the increase of imported steel from China. Latin America takes up 4% of global steel output.

Benjamin Baptista, an officer of Arcelor Mittal Brazil branch appealed to local government to crack down on the steel import from China so as to stimulate the expansion and investment of local steel makers. “Although the steel output in Latin America hasn’t risen, the demand has risen somewhat, while the gap between supply and demand is mainly offset by import, especially import from China”.

Baptista expressed meanwhile that the rate of capacity utilization of steel makers in Brazil, Mexico and Argentine was around 80%, therefore, there was still idling capacity to meet the demand increase anytime. “The price pressure comes from global excessive capacity. Currently, the global excessive capacity is about 0.5 billion tons per year”.

Baptista said, local government need draft protection measures to protect local steel industry, and increase the investments in railway, road and port construction to reduce transport expenses, so that local steel makers can continue their expansion plans. “The steel transport fee from MinasGerais to Sao Paulo is even higher than that of China’s steel”.

“The main problems we are facing now include tax, labor legislation and lack of infrastructure. Any efforts made by the government to increase our competitiveness are welcome.” Baptista said.
Baptista predicted that the consumption quantity per capita in Latin America in 2013 would still be around 130 Kg, “still very low, stagnant”.

Of three years in the recent four years, Latin America was a net importer of steel. Latin American Steel Association predicted that Latin America would import about 17.5 million tons in 2013, while this area’s steel export was estimated to be 13.3 million tons, a year-on-year drop of 10%.