During 2020, it is estimated that the average price of a ton of steel increased 19%, a rise that impacts the construction industry and is explained by the increase in logistics costs and the suspension of the extraction of the material due to the outbreak of covid-19.
Central American businessmen report that during last year, which was marked by the sanitary and economic crisis, the average price per ton of steel increased by $130, going from $670 to $800.
El Salvador, Guatemala and Nicaragua were the Central American markets that increased their hydraulic cement imports in the first half of 2020 in year-on-year terms.
Figures from the Trade Intelligence Unit of CentralAmericaData: [GRAFICA caption="Click to interact with the graphic"]
Hardware store sales in Central America are projected to register a considerable drop, which would be mainly due to the expected decline in retail sales of paints.
The "Information System for the Impact Analysis of covid-19 on Business", prepared by the Trade Intelligence Unit of CentralAmericaData, measures the impact that the crisis will have on companies according to their sector or economic activity, considering different scenarios for the coming months.
The impact of the covid19 crisis on the construction sector in Central America is expected to be explained, to a greater extent, by the expected fall in the business of prefabricated steel structures.
The Legislative Assembly approved in second debate a bill that aims to tax in the country the sale and self-consumption of imported or locally produced cement.
The initiative, which was approved in the first debate in the Assembly in mid-February and is still pending approval by the Executive Branch, establishes that the tax will be on imported cement produced nationally, in bags or in bulk, for sale or self-consumption, of any kind, whose destination is the consumption and marketing of the product nationally.
During the first nine months of 2018, Central American companies imported hydraulic cement for $110 million, and purchases from Mexico doubled compared to the same period in 2017.
Figures from the Trade Intelligence Unit at CentralAmericaData: [GRAFICA caption="Click to interact with graphic"]
During the first six months of 2018, Central American companies imported hydraulic cement for $77 million, and purchases from China increased 42% over the same period in 2017.
Figures from the information system on the the Hydraulic Cement Market in Central America, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption="Click to interact with graphic"]
Drywall imports in the countries of the region in 2017 exceeded $65 million, and more than 65% of purchases were made by companies in Costa Rica, Panama and Guatemala.
From the report “Drywall Market in Central America” compiled by the Business Intelligence Unit at CentralAmericaData:
During the first half of the year, Central America totaled $177 million in imports of ceramic products, and purchases from Spain rose 11% over the same period in 2017.
Figures from the information system on the Ceramics Market in Central America, compiled by the Trade Intelligence Unit at CentralAmericaData:[GRAFICA caption="Click to interact with graphic"]
In the first three months of 2018, countries in Central America imported $36 million worth of hydraulic cement, 9% more than was purchased in the same period in 2017.
Figures from the Information System on the Hydraulic Cement Market in Central America, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with graph"]
The South American country is one of the leading suppliers of construction materials in the region, where Panama alone imported $86 million worth in 2014.
The sector supplying Colombian construction materials has Central America as one of its main markets, where it mainly exports articles of iron and steel, electrical appliances, ceramics, clay and stone, extracts, pigments and paints, aluminum and tools, according to figures from ProColombia.
While in the US the number of man hours needed to build a house is 9.4 hours per square meter, in Costa Rica it takes between 40 and 60.
Low labor productivity, on top of the cost of building materials, social charges and high costs of other materials such as energy, are preventing firms from being more competitive in an industry where both end house prices for completed works and gray works, exceed those in neighboring countries.
The continuous increase in sales of steel from China to Latin America was well known in Central America during 2014 when 930,000 tons of metal were imported from the asian country.
From a statement issued by the Latin American Steel Association:
Between January and October 2014, China shipped 6.7 million tons of rolled steel to Latin America, 54% more than the 4.4 million tons sent in the same period in 2013.