During the first semester of 2014, Latin America received 4 million tonnes of finished steel from China for USD 2,706 million, equivalent to an average price of USD 672 per tonne.
According to foreign trade information provided by the Chinese customs authority, during the same period, China shipped 32.9 million tonnes to the rest of the world (ex Latin America), for USD 24,342 million, at an average price of USD 741 per tonne.
Consequently, Latin America received finished steel from China at an average price 9% lower than the rest of the world. This fact is registered for all Latin American countries with the exception of Argentina, Cuba and Venezuela, which (even at reduced import levels) have received products at prices notably higher than the rest of the region and the world average. It is worth highlighting the case of Central America that received products at an average price of USD 589 per tonne 12% less than the Latin American average and 21% below the rest of the world.
This relationship of declining average prices, combined with an incremental arrival of steel products, sets the Latin American steel industry in a very delicate and serious situation as it means that local production is being replaced by unfair trade, consequence of the number of subsidies and support received by the Chinese steel companies, most of them SOEs.
To allow the continuity of this situation will lead to business closures, job losses and will affect the steel value chain. The current situation turns action by regional governments into a necessary and urgent affair
Declining prices and increasing volumes are not a recent circumstance. Graph 02 shows their evolution since January 2013. Chinese exports to Latin America grew 127% (in tonnes), while to the rest of the world they increased by 56%. In parallel, as average price per ton for the rest of the world decreased 6%, in the case of Latin America it dropped 11%, describing an always declining trend.
Source – Hellenic Shipping News