Central and South American steel demand will climb 2.5% this year to 40.4 million mt and 4.7% next year to 42.3 million mt in 2018 after slumping 13.5% in 2016, the World Steel Association said Monday.
"I think it should be looked at in the context of the significant contraction they've had in the last couple of years... you're actually coming back from a low base," worldsteel economics committee chairman TV Narendran said during the association's annual meeting in Brussels.
"While it's positive, I think they shrunk very significantly in the last few years, so one needs to look at the absolute numbers also before we get very positive about it," he added.
Reform agendas in developing countries such as Brazil, Argentina and Mexico are expected to enhance their growth potential over time, worldsteel said, but South American countries overall have been slow to benefit from the recovery in the global economy.
In Brazil, for instance, continuing depressed construction activity has curbed demand recovery in 2017, but a stronger recovery is expected in 2018.
"If you look at Latin America, I think that Brazil is slowly coming back, and I think that is helping," Narendran said. "Most of the Latin American countries who also struggled when the commodity prices dropped really low in 2015 are slowly seeing that coming back."
