29/12/25
Viewpoint: Argentina steel demand to rebound
Sao Paulo, 29 December (Argus) — Argentina's steel consumption is expected to
rebound in 2026, supported by public investments including in the Vaca Muerta
shale play, growth in key industrial sectors and improving economic conditions.
Apparent steel consumption — the sum of production and imports minus exports —
is projected to rise next year by 13pc compared with 2025, industry association
Acero Argentino said. Current apparent consumption year-to-date October is 15pc
below the 3.7mn metric tonnes (t) recorded in all of 2024, the weakest year
since 2015. Consolidated 2025 figures are not yet available, but the association
expects 2026 steel demand to exceed 2025 levels. Construction, automotive and
electrical equipment manufacturing will support the steel industry, Acero
Argentino director Carlos Vaccaro said in an interview with Argus . Since taking
office in late 2023, Argentina's right-wing president, Javier Milei, has imposed
a hard-nosed program that has included fiscal austerity, tax simplification,
trade liberalization, the partial lifting of currency controls, privatizations,
and a $20bn agreement with the International Monetary Fund (IMF) to help
stabilize the peso, which has depreciated by about 29pc this year against the US
dollar. The central bank plans to expand the currency exchange rate band
beginning in January according to the prior month's monthly inflation rate to
allow it to build more foreign currency reserves. Milei has succeeded in reining
in inflation to an annual 31.4pc in November, down from a peak of 292pc in April
2024, while making inroads in stabilizing the peso currency after allowing it to
depreciate by about 64pc in the first year of his administration. A victory by
Milei's allies in the October 2025 legislative election appears to grant him
more breathing room for his reforms to take root. The coalition expanded to 92
seats in the lower house and 21 in the Senate, giving the president enough
leverage to block any congressional vetoes on presidential decisions. This shift
strengthens his ability to advance his economic agenda. But many expectations
during Milei's first two years in office failed to materialize, and market
participants are now waiting to see what the second half of his mandate will
bring, a sell-side source told Argus . Argentina's economy is expected to grow
by 3pc in 2026 following estimated 4.2pc growth in 2025 after contracting by
1.3pc in 2024, according to the Organisation for Economic Co-operation and
Development (OECD). Investment in the mining and energy sectors, an existing
incentive regime for large-scale projects, and progress in reducing
administrative burdens will mainly drive Argentina's growth, the OECD said in
its economic outlook on 2 December. Steelmakers eye public investments
Government programs will play a key role in shaping an environment that supports
steel demand growth. A low-income housing initiative pushed by Milei will boost
long- and coated-steel demand. New incentives under the federal investment
framework, the Incentive Regime for Large Investments (RIGI), will add to that
growth. Energy projects in the oil- and gas-rich Vaca Muerta shale region also
require large volumes of steel. These projects use steel tubes for pipelines, as
well as plates welded for critical infrastructure. Mining developments will
provide further momentum, Vaccaro said. Argentina plans to raise its investment
budget by 48.2pc next year, largely directed toward sectors that consume large
volumes of steel and other capital goods. Projects scheduled to start in 2026
include railway upgrades, highway construction in San Juan and Buenos Aires, as
well as dams and pipelines, according to Argentina's 2026-2028 investment plan.
Argentina's crude steel output increased by 10.7pc to 374,900 metric tonnes (t)
in November from a year earlier, Acero Argentino said last week. Hot-rolled
steel output rose by just 0.7pc to 338,200t from a year earlier. Cold rolled
steel output fell by 1.1pc to 82,899t in November on the year. Investments in
Vaca Muerta, Argentina's massive shale oil and gas formation, have partially
supported crude steel demand throughout the year, including in November, the
industry chamber said. Still, a 29pc reduction in automobile production in
November on the year weighed on steel demand. Fresh market for imports Weak
domestic activity in Argentina and the depreciated peso limited import flows
into the country in 2025, compared with record-high levels in neighboring
countries like Brazil . But Acero Argentino expects a surge in imports once
economic conditions improve as the peso stabilizes. "There is enormous concern
about a substantial increase in imports once activity picks up," Vaccaro said.
Local mills face what Vaccaro calls an "uneven playing field", competing against
subsidized foreign products and lax technical regulations that allow uncertified
materials into the market. Rising imports of finished goods containing steel add
an additional layer of pressure, weighing on local producers. Subdued demand and
stiff competition from overseas have slowed overall industrial activity, leaving
steel plants running at less than 60pc of capacity over the past year, Vaccaro
said. It is unclear whether Argentine steelmakers alone will be able to absorb
all of this expected demand. By Isabel Filgueiras Send comments and request more
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