Alacero, Santiago, Chile

Towards fair competition in Latin Americas steel industry

Following the meeting of the Steel Committee of the OECD (Organization for Economic Cooperation and Development) and the strong insistence of the steel industry on the damage that current overcapacity and unfair trade practices of China are causing to the global and Latin American steel markets, the governments of our continent are beginning to act in favor of ensuring a level playing field in regional trade. In Latin America, there are currently 27 resolutions in force against steel imports from China, and another 4 investigations in progress.

On Friday June 19, the Secretary of Economy of Mexico published a final resolution of the investigation on imports of cold rolled steel sheets from China, which imposes anti-dumping duties between 65 % and 103 % for Chinese imports. The investigation by the Mexican authorities began in December 2013 after the application of the Mexican companies

Ternium Mexico and AHMSA (Altos Hornos de Mexico). This resolution follows another one published in Mexico last June 9, which set preliminary countervailing duties on imports of hot rolled steel sheets from China, Germany and France, and established tariffs 72.16 % and 78.96 % for products from China. Just over a month ago, the Government of Peru also established a definitive antidumping duty order on imports of hot rolled steel pipes from China, applying antidumping duties between US$ 60 and US$ 90 per ton.

The problem of steel imports from China is serious and affects the most countries in the region. Latin America is the second most important destination for the Chinese steel, second only to South Korea. During the first four months of 2015, 3.2 million t of Chinese steel entered Latin America, many of them under unfair trade conditions. This volume is 29 % higher than in the same period in 2014 and represents 39 % of the total imports of finished steel of Latin America.

Chinese steel is produced by companies that operate in a non-market economy environment. China´s government subsidizes and support these companies, which allows them to operate in conditions that would be economically un- sustainable for any private enterprise. Their indiscriminate exports at dumped prices are threatening the existence of businesses and thousands of jobs in Latin America.

The WTO (World Trade Organization) gives tools rules that allow ensure a level field of competition, and govern- ments should use and implement them in a timely and effective manner.

Some Latin American governments are making decisions to address the problem of Chinese imports, as demonstrated by the discussed results. However, it is necessary to strengthen and expand these actions because Chinese imports may be diverted to other Latin American countries that have not taken decisions such as those of Mexico and Peru.

Alacero calls again to every country in Latin America to guarantee a level playing field according to the regulations of the WTO. Nowadays, it is not possible for a private company to compete against the Chinese government and the steel companies it owns.

About Alacero

Alacero – the Latin American Steel Association – is the organization that brings together the Steel Value Chain of Latin America to promote the values of regional integration, technological innovation, corporate responsibility, excellence in human resources, safe working environments, and social and environmental sustainability. Founded in 1959, Alacero is formed by 50 companies in 25 countries, whose production – of about 70 million t/a – represents 95 % of the steel manufactured in the region. Alacero is a Special Consulting Organization to the United Nations and is recognized as International Non-Government Organization by the Republic of Chile, host country of Alacero´s headquarters.

Alacero, Santiago, Chile