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Alacero forecast apparent steel consumption in Latin America to increase by just 0.5% year on year to 75.6 million tonnes in 2026, followed by expectations of 2.5% growth to 77.5 million tonnes in 2027. The outlook contrasts with the industry’s production performance, which remains near the lowest levels recorded in the past 15 years.
In February, it was projected that apparent steel consumption in Latin America would grow by 2.8% in 2026. Now, however, the association has lowered its forecast by 2.3 percentage points.
The association also estimated that crude steel production in Latin America totaled approximately 55.7 million tonnes in 2025, below the level recorded during the Covid-19 pandemic in 2020 and one of the weakest results in the historical series.
Finished steel production has followed a similar trend, totaling 42.0 million tonnes in 2025 and forecast to edge up only marginally to 42.2 million tonnes in 2026, despite regional steel consumption remaining relatively resilient.
“We are not facing a collapse in consumption. The problem is that production continues to fall while imports continue to rise,” Alacero executive director Ezequiel Tavernelli told Fastmarkets in an exclusive interview in early June.
According to Alacero, apparent steel consumption in the region has remained around 74 million-75 million tonnes annually, while imports have climbed from roughly 20 million tonnes several years ago to more than 30 million tonnes currently. Import penetration reached a record 41% of regional consumption in 2025.
“Four out of every ten kilograms of steel consumed in Latin America are imported,” Tavernelli said, arguing that much of this material originates from countries benefiting from state support and excess capacity.
Alacero’s latest forecast marks a notable revision from the association’s earlier expectation of 2.8% regional consumption growth in 2026.
Tavernelli said weaker expectations for Argentina, Colombia and several smaller Latin American markets were largely the result of construction-sector weakness and inventory adjustments after heavy import volumes entered the region in 2025.
“[That] was a year of very strong imports into our region, and we are hearing that not all of that material went directly into consumption. We believe inventories will need to adjust, which is why steel consumption growth is now expected to be close to zero in 2026,” he said.
The construction sector remains the largest steel-consuming segment in Latin America, accounting for roughly 50% of regional demand, making activity levels in housing and infrastructure particularly important for the market outlook.Beyond construction, industrial activity remains a critical source of consumption across the region. The automotive sector represents 18% of demand, making it the second-largest steel-consuming segment, although vehicle production lost momentum during the second half of 2025.
Metal products account for a further 14% of regional steel demand, while machinery represents 13% and was among the strongest-performing industrial segments last year, supported by growth in Brazil, Argentina and Chile.
Household appliances and electrical equipment each account for 2% of steel consumption, while other transport applications represent the remaining 1%. Despite the mixed performance across sectors, Alacero expects industrial activity to gradually improve as investment, infrastructure spending and economic growth gain traction across the region.
The association expects conditions to improve in 2027, forecasting regional steel demand growth of 2.5%.
Brazil and Mexico are expected to remain the main drivers, supported by recently implemented trade measures and industrial policies, while Argentina could benefit from investments linked to energy and mining projects. Colombia is also expected to return to growth.
Tavernelli said the expected improvement should not be viewed merely as a rebound from a weak year.
“Latin America still consumes around 100 kilograms of steel per capita. Developed economies consume between 180 and 250 kilograms per capita, and countries such as China and South Korea consumed far more than that during their industrialization phases,” he said. “The region still has enormous room to grow through infrastructure development and industrial expansion.”
Breaking down the growth, the association forecasts apparent steel consumption in Brazil to increase by 0.9% to 27.0 million tonnes in 2026 and by a further 2.5% to 27.7 million tonnes in 2027.
Mexico is expected to post the strongest growth among the region’s major markets, with demand rising 4.0% to 26.0 million tonnes in 2026 and another 3.2% to 26.8 million tonnes in 2027.
By contrast, Alacero expects steel demand in Argentina to decline by 0.8% to 3.9 million tonnes in 2026 before rebounding 8.6% in 2027, while Colombian consumption is forecast to fall 2.4% to 3.8 million tonnes before recovering 3.3% the following year. A 4.9% decline among smaller Latin American markets in 2026 is also projected.
Despite the expected recovery, Alacero continues to view global steel overcapacity as the biggest threat facing the region.
According to estimates from Organization for Economic Co-operation and Development (OECD) cited by Alacero, global excess steelmaking capacity is expected to increase from 640 million tonnes in 2025 to 721 million tonnes by 2027. More than half of global crude steel production already comes from China.
Tavernelli argued that Chinese domestic steel demand continues to decline while production remains close to 1 billion tonnes per year, leaving a substantial surplus available for export markets.
“China alone has more than 200 million tonnes of steel production beyond domestic demand. That is roughly four times Latin America’s annual steel production,” he said.
The executive added that the issue extends beyond China itself, pointing to growing investments by Chinese steelmakers across Southeast Asia and increasing exports from countries such as Vietnam, South Korea, Egypt and Turkey.
Alacero welcomed the trade measures adopted by countries including Brazil, Mexico, Colombia and Peru, arguing that they have helped slow the advance of unfairly traded imports.
Fastmarkets’ price assessment for steel hot-rolled coil import, cfr main ports South America was $650-690 per tonne on Friday June 19, down by $15-20 per tonne from $665-710 per tonne the previous week.
But Tavernelli warned that Latin America remains vulnerable to trade diversion as the US and Europe continue strengthening barriers against subsidized steel imports.
“We are concerned about countries in the region that are not defending themselves adequately. Steel that can no longer enter other markets will continue looking for destinations with fewer protections,” he said.
For Alacero, the longer-term challenge extends beyond steel itself.
The association argues that rising imports are contributing to a broader process of deindustrialization across Latin America, where manufacturing’s share of GDP has declined over recent decades while exports increasingly rely on primary commodities rather than higher-value manufactured products.
In Alacero’s assessment, the industry’s challenge increasingly extends beyond steel prices and trade flows, touching on a broader question of industrial competitiveness across Latin America.
“We have the raw materials, the energy resources, the industrial base and the talent to become one of the world’s strongest steel-producing regions,” Tavernelli said. “But we need a level playing field if we want local industry to grow alongside the region’s economic development.”
Beneath the forecasts for 2026 and 2027 lies a broader concern. Latin America remains a region with relatively low steel consumption per capita, significant infrastructure deficits and vast potential for industrial growth. In Alacero’s view, the opportunity is still intact.
The risk is that, unless governments succeed in creating what the association describes as a “level playing field,” future growth in steel demand could translate into rising imports rather than renewed industrial expansion.
For the region’s steelmakers, the debate is therefore no longer just about trade, but about where Latin America’s next stage of development will ultimately be built.
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