Trading Market Insights: June 2024

In May, Brazil’s interest rates continued to fall, but Mexico’s rates held steady. Brazil’s inflation exceeded market expectations, and Mexico also reached its highest level in four months. Both countries witnessed growth in their manufacturing sectors. Analysts remain optimistic about the region’s growth for the remainder of the year.

The Leeco Trading team is carefully monitoring international trading market developments, particularly within the Latin American region. Here are some of the biggest headlines we are watching.

Brazil Economy Rebounds, Flood Impacts Unclear

Brazil’s economy rebounded in the first quarter, after a sluggish second half of 2023, driven by stronger investments and consumer demand. Concerns remain about the impact of disastrous flooding in southern Brazil last month, which left a trail of destruction, opened the door to more government spending and pushed up food prices.

Chile’s Economy Contracts as Rebound Fades

For the second consecutive month, Chile’s economic activity has declined due to decreases in both mining and commerce. The country’s economy is now slowing down this quarter, following a significant jump in gross domestic product earlier in the year. The growth outlook is currently being supported by interest rate cuts and rising copper prices.

Mexico’s Economy Improves in the First Quarter of 2024

Mexico’s economy grew 1.1% in the first quarter, driven by the services sector, according to the national statistics bureau. The first-quarter GDP growth implies a moderate acceleration compared to the fourth quarter of 2023, when output was flat. The consensus forecast for 2024 GDP growth (fourth quarter/fourth quarter) compiled by Banco de México is still around 2.2%.

Consumption of Steel Products in Mexico up 6.2%

In April, apparent consumption of finished steel products in the Mexican market increased by 12% year-over-year to 2.52 million metric tons, the highest in the last eight months. Hot rolled sheet, cold rolled sheet and alloy steel flats were the products driving this increase. However, on the manufacturing side, production of finished steel products totaled 1.56 million metric tons, a 3.3% decrease year-over-year, marking the third consecutive annual decline and the lowest volume in the last nine months. Steel plate, structural profiles and wire rod were the products that most impacted production in April.

This information is an excerpt from Leeco Trading’s Month Year Trading Market Report newsletter.

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