February saw a lot of mixed global economic indicators. Our main takeaway, based on historical data, GDP and steel import numbers, point to increased steel product import demands in Latin American markets in 2019 and beyond.

As demand increases, an upward pressure in prices is expected. Manufacturers and builders should expect increased prices and be prepared for their impact. Here are the top metrics we’re looking at this month.

By examining market trends and economic indicators from 2017 and 2018, insight can be provided into how the Latin American market will shape out in 2019.

The GDP of top South American and Latin American countries, including Brazil, Mexico and Argentina, grew 10.4% in 2017 over 2016. GDP growth of these countries is expected to continue to grow in 2019. Below is a graph showing current GDP of Latin American Countries.

Examining steel import numbers in Mexico and Brazil over the past couple of years shows growth, and these numbers are expected to increase further.

Brazil imported 5 million tons of steel at its peak in 2011. However, after the 2015 Brazilian recession hit, steel imports plummeted. Steel imports recovered to a level of 2 million tons in 2017, and this number is expected to grow further in 2019.

In 2017, Mexico produced 20 million metric tons of steel, exported 5.2 million MT and imported 14.9 million MT. There is significant steel import demands in the Mexico market, and import numbers are expected to increase this year.

Leeco Steel’s Executive Vice President, Jason Fredstrom, expects to see increased demand from Latin American customers due to growing markets.

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“We are seeing strong growth in many Latin American markets, especially Brazil and Mexico,” Jason said. “Having successfully served Latin America for years, we are well-positioned to meet growing demand with our exceptional service, expertise and sourcing capabilities. Additionally, we are also looking to expand our geographic reach in Latin America to better serve more customers throughout the region.”

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Recent initiatives in Mexico and Brazil are expected to have significant impact on the economic growth and trade market of these countries.

Brazilian president Jair Bolsonaro recently announced that infrastructure investments are a top priority for him. Major infrastructure projects in Brazil will increase the number of materials needed for construction, including a variety of material imports.

Brazil also expects to see significant growth in automobile production in the next 2-3 years, estimating production to exceed 4 million vehicles in 2022.

As of November 2018, Mexico announced 31 “trade remedies,” including anti-dumping duties and countervailing duties, placed in effect against steel product imports.

Anti-dumping duties go into effect when a supplier imports goods to a country and sells them at a less-than-fair market value. Typically, this means the goods are sold at a lower price than they are in the exporter’s home market or at a lower price than the cost to produce the good.

Countervailing duties go into effect when subsidies or assistance is provided to an industry by a foreign government. This can include low-rate loans, tax exemptions or indirect payments.