Latin America: Finished Steel Imports From China Grow 29% in Jan/Mar 2015, While Their Average Price Falls 7%
05/19/2015 - Alacero released their Q1-2015 report on the state of Chinese finished steel imports within the Latin American market.
Between January and March 2015, Latin America imported 2.4 million tons of finished steel from China for US$ 1,493 million. This indicates an average price of US$ 621 per ton. During the period, China shipped 23.5 million tons to the rest of the world for US$ 14,082 million at an average price of US$ 597 per ton, according to the figures of the Chinese Customs Authority.
Consequently, during the first quarter of 2015, Latin America received finished steel imports from China at an average price 4% higher than the rest of the world, reversing the trend of the recent times.
Low prices especially affected Central America (that faced an average price of US$ 501, 16% lower than the average for the rest of the world) and Peru (US$ 535, 10% lower). In addition, Central America was the second largest regional destination for Chinese finished steel. Peru came in fifth place. The Dominican Republic received Chinese steel at a price 15% lower than the r-o-w average, but for a very small volume of imports.
Finished steel shipments from China to Latin America grew markedly above the world average between the beginnings of 2013 to the 1Q 2015. During this period, average export prices declined similarly for both destinations (with a cumulative drop exceeding 20%).
These falling prices in exports of finished steel are part of China’s strategy to increase exports in order to maintain its plants in operation and avoid unemployment. Financial considerations or lean profitability come second to the other goals, since steel companies in China are state-owned and benefit from broad government support and subsidies.
This situation translates into increasing trade tensions between the region and China. Currently, 60% of the steel related anti-dumping measures (in process or in force) of Latin America are aimed against China. These measures –born from private initiatives- are necessary but only palliative. A definitive solution to unfair trade in the region requires the immediate and far-reaching action of the national governments.
Flat products to Latin America
During 1Q 2015, flat products concentrated 59% of total finished steel exports from China to Latin America, reaching 1.4 million tons. Average price was 6% lower than the rest of the world, reducing the 16% gap observed a year ago.
Between 1Q 2013 and 1Q 2015, flat steel shipments from China to Latin America grew 169%, while shipments to the rest of the world increased 88%. During the period, average price to Latin America fell 14%, while to the rest of the world dropped 21%.
Sheets and coils of other alloy steels represented 40% of the flat steel imports from China (566 thousand tons). Brazil and Central America –the main importers from China –faced prices 8% and 10% lower than the rest of the world.
Peru and Colombia were also very impacted by Chinese low prices. Peru registered an average price of US$ 557 per ton (15% lower than r-o-w) and Colombia, US$ 579 per ton (12% lower).
Long products and seamless tubes to Latin America
During 1Q 2015, long products exports from China to Latin America represented 35% of the finished steel arrived to the region from China and registered an average price of US$ 555 per ton, 19% above the r-o-w. Brazil, the main importer, received these products at an average price 25% higher than r-o-w.
Seamless pipes shipped to Latin America from China (5% of the Chinese steel exports to the region) recorded an average price of US$ 1,072 per ton, 7% below the world average.
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 inhuman resources, safe working environments, and social and environmental sustainability. Founded in 1959, Alacerois formed by 50 companies in 25 countries, whose production –of about 70 million annual tons– represents 95% of thesteel 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.
Consequently, during the first quarter of 2015, Latin America received finished steel imports from China at an average price 4% higher than the rest of the world, reversing the trend of the recent times.
Low prices especially affected Central America (that faced an average price of US$ 501, 16% lower than the average for the rest of the world) and Peru (US$ 535, 10% lower). In addition, Central America was the second largest regional destination for Chinese finished steel. Peru came in fifth place. The Dominican Republic received Chinese steel at a price 15% lower than the r-o-w average, but for a very small volume of imports.
Finished steel shipments from China to Latin America grew markedly above the world average between the beginnings of 2013 to the 1Q 2015. During this period, average export prices declined similarly for both destinations (with a cumulative drop exceeding 20%).
These falling prices in exports of finished steel are part of China’s strategy to increase exports in order to maintain its plants in operation and avoid unemployment. Financial considerations or lean profitability come second to the other goals, since steel companies in China are state-owned and benefit from broad government support and subsidies.
This situation translates into increasing trade tensions between the region and China. Currently, 60% of the steel related anti-dumping measures (in process or in force) of Latin America are aimed against China. These measures –born from private initiatives- are necessary but only palliative. A definitive solution to unfair trade in the region requires the immediate and far-reaching action of the national governments.
Flat products to Latin America
During 1Q 2015, flat products concentrated 59% of total finished steel exports from China to Latin America, reaching 1.4 million tons. Average price was 6% lower than the rest of the world, reducing the 16% gap observed a year ago.
Between 1Q 2013 and 1Q 2015, flat steel shipments from China to Latin America grew 169%, while shipments to the rest of the world increased 88%. During the period, average price to Latin America fell 14%, while to the rest of the world dropped 21%.
Sheets and coils of other alloy steels represented 40% of the flat steel imports from China (566 thousand tons). Brazil and Central America –the main importers from China –faced prices 8% and 10% lower than the rest of the world.
Peru and Colombia were also very impacted by Chinese low prices. Peru registered an average price of US$ 557 per ton (15% lower than r-o-w) and Colombia, US$ 579 per ton (12% lower).
Long products and seamless tubes to Latin America
During 1Q 2015, long products exports from China to Latin America represented 35% of the finished steel arrived to the region from China and registered an average price of US$ 555 per ton, 19% above the r-o-w. Brazil, the main importer, received these products at an average price 25% higher than r-o-w.
Seamless pipes shipped to Latin America from China (5% of the Chinese steel exports to the region) recorded an average price of US$ 1,072 per ton, 7% below the world average.
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 inhuman resources, safe working environments, and social and environmental sustainability. Founded in 1959, Alacerois formed by 50 companies in 25 countries, whose production –of about 70 million annual tons– represents 95% of thesteel 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.
