Argentinian steelmaker Ternium Siderar expects 12% year-on-year growth in the company's steel shipments in 2017, and 8% in 2018, backed by a brighter political and economical scenario in the country.
"We had previously expected a 10% growth for 2017, but the last quarter of the year has been better than we estimated in terms of volumes," Siderar CEO Martin Berardi said Tuesday on the sidelines of the Alacero conference in Cancun.
Berardi highlighted the political stability as the driver of investments, and thus higher steel consumption.
"Two years in a row with growth in Argentina is a very positive thing; we hadn't seen this in a while," he said. "Activities in infrastructure, construction, agro business, energy, and now investments in the Vaca Muerta [shale gas reserve] are boosting the steel sector."
Investments surrounding the Vaca Muerta fields are already boosting several sectors, including steel, Berardi said.
"For 2018, the expected demand of steel for this project is very good, especially for steel tubes, seamless and welded pipes," he said.
Berardi said steel prices in Argentina have been following the region's market, especially Brazil and Mexico.
"There's a $40/mt difference between one country and another, but we have prices very similar with the region. If something changes, it is due to the exchange rate difference," he said. "We only follow the international market."
Nevertheless, Berardi recognized that Argentinian domestic prices are more connected to the international market than to domestic fundamentals. "The Chinese effects in the international market affect the Argentinian market," he said. "Rising costs such as coke, electrodes, iron ore, scrap -- all of these directly impact prices in Argentina."
