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Alacero: Low-Priced Steel Imports from China Growing in Latin America
12/24/2014 - In the third quarter of 2014, Latin America received 6 million tons of finished steel from China at a total value of US$ 4.043 billion, said Alacero, the Latin American Steel Association.
This implies an average price of US$ 669 per ton. In the same period, China sent to the rest of the world (excluding Latin America) 52.7 million tons at a value of US$ 38.372 billion, resulting in an average price of US$ 728 per ton, according to information provided by the Chinese Customs Authority. Consequently, Latin America received finished steel from China at an average price 8% lower than the rest of the world.
The commercial behavior of the Chinese companies — decreasing prices and rising volume — remains the main risk to the productive and financial activity of the regional steel industry. Many of these operations involve unfair trading conditions, as reflected in the increasing number dumping investigations that are underway in Latin America (25 in process and 41 effective).
Central America continues to be one of the most affected destinations (as in the first half of 2014). It ranks as the third largest port of entry of the region and received products at an average price of US$ 580, 20% below the rest of the world and 13% below the Latin American average. Peru, Ecuador, Colombia and Chile also recorded particularly low average prices.
On the other hand, Argentina, Cuba and Venezuela (although with reduced import volume) are receiving finished steel from China at a significantly higher price than that observed for Latin America and the rest of the world.
Until the period Jul/Sep 2014, Chinese exports to Latin America accumulated volume increase 113%, despite a slight decrease between the 2nd and 3rd quarter of this year, Alacero said.
In the same period, exports to the world increased by a less significant proportion (70%). While in the same interval, the average price for the rest of the world registered a drop of 10%, in the case of Latin America price decrease deepened to 14%, maintaining a downward trend.
The deepening and steady growth of this trend was considered and debated during the Latin American Steel Congress, Alacero-55, that took place in Mexico City last November. China as a major producer and exporter of steel in the world, as well as its strong weight in the global overcapacity problem, were among the central topics of the Congress. In face of the great harm that the Chinese unfair trade practices cause to Latin America (in terms of losses of local jobs and disincentives to investment), the leaders of the regional industry reiterated their call to local governments to work fast and decisively to assure a level playing field, according to WTO guidelines.
Chinese exports to Latin America by Products
Among finished steel imports to the region from China, flat products concentrated 67% of the total, long products, 27% and seamless pipes, 7%. Between Jan/Sep 2014, 4 million tons of flat products arrived from China to Latin America, at a price 18% lower than that recorded for the rest of the world. Brazil and Chile (the two largest importers of Chinese steel) registered prices 14% and 19% lower than the rest of the world, respectively. On the other hand, among the markets in the region, only in Argentina (though with low volume) shows prices above the average: US$ 826 per tonne. Ecuador and Peru registered average prices of US$ 595 and US$ 605 per ton, respectively, the lowest of the region.
Between 1Q/2013 and 3Q/2014, Chinese exports of flat products to Latin America grew by 157% while the flow to the rest of the world increased 85%. In the same period, the average price per ton fell 10% for exports to Latin America and 8% for the rest of the world.
Sheets and coils of other alloy steel represent 38% of total flat steel (and 25% of finished) admitted from China to the region in Jan/Sep 2014, a volume of 1.5 million tons. Alarmingly, exports of these products from China to Latin America increased 4-fold between Q1/2013 and 3Q/2014, while the flow to the rest of the world only doubled. During the period, the proportional drop in prices was similar for both areas: 10%, but Latin America average price continues below the one observed for the rest of the world.
Long products market describes a different situation. In 3Q/2014, Chinese exports to Latin America of these products (27% of the steel received from the Asian giant) recorded an average price per ton of US$ 571, slightly higher (2%) than that observed for the rest of the world. In Brazil, the most important importer of the region, average price was 15% higher than for the rest of the world.
Latin America receives seamless pipes from China at an average price per ton of US$ 1,247, down 5% than the rest of the world. But in the case of Brazil, this ratio is reversed, since seamless pipes are arriving at an average price 19% above the world mean.
The commercial behavior of the Chinese companies — decreasing prices and rising volume — remains the main risk to the productive and financial activity of the regional steel industry. Many of these operations involve unfair trading conditions, as reflected in the increasing number dumping investigations that are underway in Latin America (25 in process and 41 effective).
Central America continues to be one of the most affected destinations (as in the first half of 2014). It ranks as the third largest port of entry of the region and received products at an average price of US$ 580, 20% below the rest of the world and 13% below the Latin American average. Peru, Ecuador, Colombia and Chile also recorded particularly low average prices.
On the other hand, Argentina, Cuba and Venezuela (although with reduced import volume) are receiving finished steel from China at a significantly higher price than that observed for Latin America and the rest of the world.
Until the period Jul/Sep 2014, Chinese exports to Latin America accumulated volume increase 113%, despite a slight decrease between the 2nd and 3rd quarter of this year, Alacero said.
In the same period, exports to the world increased by a less significant proportion (70%). While in the same interval, the average price for the rest of the world registered a drop of 10%, in the case of Latin America price decrease deepened to 14%, maintaining a downward trend.
The deepening and steady growth of this trend was considered and debated during the Latin American Steel Congress, Alacero-55, that took place in Mexico City last November. China as a major producer and exporter of steel in the world, as well as its strong weight in the global overcapacity problem, were among the central topics of the Congress. In face of the great harm that the Chinese unfair trade practices cause to Latin America (in terms of losses of local jobs and disincentives to investment), the leaders of the regional industry reiterated their call to local governments to work fast and decisively to assure a level playing field, according to WTO guidelines.
Chinese exports to Latin America by Products
Among finished steel imports to the region from China, flat products concentrated 67% of the total, long products, 27% and seamless pipes, 7%. Between Jan/Sep 2014, 4 million tons of flat products arrived from China to Latin America, at a price 18% lower than that recorded for the rest of the world. Brazil and Chile (the two largest importers of Chinese steel) registered prices 14% and 19% lower than the rest of the world, respectively. On the other hand, among the markets in the region, only in Argentina (though with low volume) shows prices above the average: US$ 826 per tonne. Ecuador and Peru registered average prices of US$ 595 and US$ 605 per ton, respectively, the lowest of the region.
Between 1Q/2013 and 3Q/2014, Chinese exports of flat products to Latin America grew by 157% while the flow to the rest of the world increased 85%. In the same period, the average price per ton fell 10% for exports to Latin America and 8% for the rest of the world.
Sheets and coils of other alloy steel represent 38% of total flat steel (and 25% of finished) admitted from China to the region in Jan/Sep 2014, a volume of 1.5 million tons. Alarmingly, exports of these products from China to Latin America increased 4-fold between Q1/2013 and 3Q/2014, while the flow to the rest of the world only doubled. During the period, the proportional drop in prices was similar for both areas: 10%, but Latin America average price continues below the one observed for the rest of the world.
Long products market describes a different situation. In 3Q/2014, Chinese exports to Latin America of these products (27% of the steel received from the Asian giant) recorded an average price per ton of US$ 571, slightly higher (2%) than that observed for the rest of the world. In Brazil, the most important importer of the region, average price was 15% higher than for the rest of the world.
Latin America receives seamless pipes from China at an average price per ton of US$ 1,247, down 5% than the rest of the world. But in the case of Brazil, this ratio is reversed, since seamless pipes are arriving at an average price 19% above the world mean.
