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Latin American finished steel annual production falls 2pct in 2014

End of the year figures describe that the Latin American steel market did not grow during 2014, impacted by the global and regional economic deceleration. Advance information of January 2015 indicates that 2014's market weaknesses persist at the beginning of the new year.

In 2014, Latin America and the Caribbean produced 65.6 million tonnes of crude steel, in line with 2013. Brazil represented 52% of the regional output (33.9 million tonnes), even when it described a slight drop of 1% YoY.

In 2014, the strongest crude steel production percentage growths were registered in Ecuador (16%), Peru (8%), Argentina (6%) and Mexico (4%). On the other hand, Venezuela and Chile described declines of 31% and 15%, respectively.

Regional production of finished steel reached 56 million tonnes in 2014, 2% less than 2013. Brazil was the main producer (24.8 million tonnes), representing 44% of the regional output. It was followed by Mexico with 17.3 million tonnes and 31% share of production. The countries that increased their finished steel production the most were: Dominican Republic (16%), Peru (12%), Colombia (9%), Mexico (6%) and Ecuador (6%). Meanwhile, Venezuela and Chile decreased by 30% and 15%, respectively.

Finished steel consumption;
Apparent finished steel use reached 69.5 million tonnes in 2014, an increase of 1% vs 2013. The most significant steel use expansions were observed in Mexico a market that grew 12% vs 2013 to reach 22.5 million tonnes), Colombia (21% to reach 4.2 million tonnes), Peru (24% to reach 3.4 tonnes) and the Dominican Republic (36% to reach 516.000 tonnes). On the other hand, Venezuela displayed an important 36% drop, because of its recessive economy and an inflation that reached 60% in 2014 according to the Venezuelan Central Bank. Finished steel consumption in Ecuador and Chile contracted by 13% and 5%, respectively.

In Brazil, finished steel consumption decreased 7% in 2014, equivalent to 1.8 million tonnes below 2013 consumption. This was a consequence of the economic downturn of the country (Brazil's economy contracted 0.12% in 2009, the worst figures since 2009, according to the Central Bank) and of problems arising from the high tax burden, increasing inflation and energetic shortages.

Trade balance;
Latin America imported 22.9 million tonnes of finished steel in 2014, 8.2% above 2013 level (21.2 million tonnes), discouraging the local industry, increasing trade frictions and jeopardizing jobs. Currently, imports account for 33% of the regional consumption.

Latin American exports of finished steel reached 8.5 million tonnes, a slight increase of 0.7% versus 2013. In 2014, the regional trade deficit reached 14.4 million tonnes. This unbalance is 13% deeper than in 2013 (12.8 million tonnes).

In 2014, several Latin American and Caribbean countries displayed finished steel trade deficit. The most significant was registered in Mexico (5.1 million tonnes); followed by Colombia (2.4 million tonnes), Peru (1.9 million tonnes) and Chile (1.5 million tonnes). Graph 02 describes the evolution of trade flows and balances.

Production January 2015;
Advance information of January 2015 indicates that crude steel production reached 5.5 million tonnes, 2% above January 2014. Finished steel output was 4 million tonnes, 11% less YoY. These figures signal that market weaknesses of 2014 continue into the beginning of the new year.