China’s dominance in world steel production puts pressure on Latin America’s steel sector
Photo: Acero De Construcción Barra. By: saweang. Source: PixaBay.
According to studies conducted by the Latin American Steel Association (Alacero), the steel sector in the region is expected to experience a gradual recovery in 2023. However, several factors contribute to the sluggishness, including uncertainties surrounding international trade and domestic policies implemented by China to revive its steel production for industrial recovery. China, as the world’s largest steel producer, accounted for 54% of the total global steel production in 2022, reaching 1.878 million metric tons, as highlighted by Marcelo Salazar, the executive director of the Dominican Steel Association (Adoacero).
Salazar emphasized that the decline in steel consumption in China, driven by a reduction in the construction sector and an oversupply in the domestic market, along with high interest rates, persistent inflation, the energy crisis, and the conflict in Ukraine, will impact steel producers in the Latin American region. He further highlighted that any changes in China’s currency could trigger a ripple effect in the Latin American market, as the Asian country is a significant buyer of raw materials from various countries in the region.
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