The Latin American Iron and Steel Association (Alacero) said on June 12 that crude steel production in Latin America fell to 3.55 million tons in April due to the impact of the new coronary pneumonia epidemic, a year-on-year decrease of 34%. From January to April, the output of crude steel in Latin America was 18.3 million tons, down 14% year-on-year.

Alacero said that the decline in crude steel output is a manifestation of sluggish demand and the interruption of operations of steel companies. In April, crude steel production in the Latin American region using long-process steelmaking was 3.56 million tons, a decrease of 22% from March, the first month-on-month decline since 2009. In April, steel production in Latin America fell 32% year-on-year to 2.9 million tons.

In April, the new coronary pneumonia epidemic began to spread, with Argentina and Brazil being the most affected. Compared with April 2019, steel production in these two countries fell by 73% and 37% year-on-year, respectively. To balance supply and demand, some factories in the area have closed blast furnaces. According to Alacero data, in April and May, seven blast furnaces in Latin America were shut down, affecting a total output of about 7 million tons. As of the end of April, the utilization rate of steel production capacity in Latin America was 42%, of which Brazil was 43% and Mexico was 60%.

"The recovery in Latin America will vary from country to country, and this region may become one of the last regions where economic activity returns to normal." Francisco Leal, head of Alacero, said that the steel industry is a capital-intensive and high fixed-cost industry. A capacity utilization rate of about 80% is required to ensure modernization and high efficiency. Alacero estimates that the current situation may continue into the third quarter.