Cheap Chinese steel threatens jobs in Latin America
Latin American metal workers are clamouring for higher import tari s as cheap Chinese steel oods the region, threatening hundreds of thousands of jobs linked to the industry.
Last year, the region imported a record 10 million tonne of Chinese steel — a 44% rise from the year before, according to data from the Latin American Steel Association (Alacero).
Two decades ago, the gure was 85,000 tonne.
“China is too present in Latin America,” Alacero executive Alejandro Wagner told AFP. “No one is against trade between countries, but it must be fair trade,” he added.
As the pressure increases, steel plant bosses and workers in countries like Chile and Brazil — the top producer in the region and world number nine — are pressing governments for higher import tari s.
If they were to do so, they would follow Mexico and the United States, which have imposed additional tari s of 25% on Chinese imports amid a surge of cheap exports as a result of Beijing subsidies and excess production.
Yellen concerned
Earlier this month, US Treasury Secretary Janet Yellen expressed concern about “substantial over-investment and excess capacity” in sectors like steel and aluminum in China, which, she said, had “decimated industries across the world and in the U.S.”
A dive in the Asian giant’s construction sector has further added to an oversupply of steel for exportation.
Data from the Economic Commission for Latin America and the Caribbean in 2022 showed China leading global steel production with 54%, followed by India (6.6%).
Latin America’s top producers — Brazil, Mexico, Argentina and Colombia — came in a combined 3.1%.
In Latin America, some 1.4 million people work in the steel industry. But their livelihoods have increasingly come under re as Chinese steel now sells as much as 40% cheaper than it could viably be produced on home soil.
Huge casualty
One casualty is the Huachipato steel plant, Chile’s biggest, some 500 km (310 miles) south of Santiago. It announced the winding down operations, threatening about 2,700 direct and 20,000 indirect jobs.
“Closing Huachipato would be like an atomic bomb” hitting the region, worker Carlos Ramirez told AFP.
“What we are experiencing is very painful,” the 56-year-old said, warning of a looming “social earthquake” for the port city of Talcahuano that has lived mainly from steel for 70 years. Since 2009, Huachipato has incurred losses of more than $1 billion.
In a last-ditch e ort to stay aoat, the rm has asked Chile’s CNDP pricedistortion commission to recommend the government impose a 25% tari on imported steel.
The commission, in a recent ruling found “sucient evidence to support the existence of dumping” — the selling of Chinese steel below cost — and recommended a levy of 15%.
Huachipato specialises in key inputs for mining industry, including steel bars used in the milling copper — of which Chile is the world’s largest producer.
During the COVID-19 pandemic, when world trade was interrupted, “it was Huachipato that kept the country’s steel supply” aoat, Economy Minister Nicolas Grau told AFP.
The government, however, has its hands tied: Chile signed a free trade agreement with China in 2006 and risks punitive measures if it opts for a tari to protect its steel industry against dumping.
In Brazil, steel imports from China rose 50% last year as output slid 6.5% as per the Brazil Steel Institute. Gerdau, one of the country’s largest steel producers, laid o 700 workers due to the “challenging scenario faced by the Brazilian market in the face of predatory import conditions of Chinese steel,” the company said.