The huge volume of steel product imports into Latin America originating from China is a subject of growing concern, the president of the Latin American steel chamber, Alacero, said Thursday.
Martin Berardi said the steel and metal-mechanic sector is worried about the influx of Chinese products in what it sees as unfair trade conditions.
"China's steel exports to Latin America reached 9 million mt [in 2014], the equivalent to 13% of the regional steel consumption. These shipments grew 70% in just two years," Berardi said.
In 2013, direct imports to Latin America totaled 5.3 million mt, with indirect imports of 6.5 million mt.
"The huge idle capacity of China in the steel industry [425 million mt, equivalent to 6.6 times the annual output of Latin America and four times the US annual consumption] plus zero profitability by Chinese steel companies [owned by the state] show that China is not a market economy," Berardi said.
In 2014, Latin America received around $80 billion in manufactured goods from China, he said.
Regarding the direct Chinese investments in Latin America, Berardi said China is "entering in the financing of infrastructure projects and managing special conditions for the supply of manufactured goods. Some agreements avoid bidding processes and eliminate competence. The fundamental problem is unfair competition."
These agreements and the massive entrance of products under unfair competition, Berardi said, are eroding trade in the region.
"When looking at the numbers of exports among the countries of the region, it becomes evident that the massive imports from China are causing loss of interest in regional agreements," he said.
Source: Platts
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