Mexico, the world's tenth largest steel consumer, is not only facing unfair steel trade from state-owned enterprises in China, but also some other Asian countries, said the director general of the Chamber of the Iron and Steel Industry of Mexico (Canacero), Salvador Quesada, in an interview with S&P Global Commodity Insights.
“The industry is competing against state-owned enterprises and is contending with overcapacity issues in Asia. The challenge is not limited to China but extends to its satellite countries in Southeast Asia," Quesada said.
Considering that statement, SteelOrbis analyzed the foreign trade statistics of the steel industry in Mexico, and found that the Mexican government's measures to control unfair steel trade from China had an effect with an 18.7 percent reduction in steel imports. With 981,000 tons of Chinese steel imported to Mexico from January to October, its market share decreased to 9.3 percent. With that share, China is the fourth largest steel supplier to Mexico. However, the Asian countries altogether including China is the second largest steel supplier to Mexico, overtaking South Korea from that position.
Asian steel imports to Mexico totaled 1.77 million, up 11.3 percent compared to January-October period of last year. Of that total, China exported 981,000 mt to Mexico, 18.7 percent less; Vietnam exported 585,000 mt, 100.3 percent more and Malaysia exported 200,000 mt, 129.9 percent more.
The brake on steel from China was through commercial tariffs of up to 50 percent for countries with which Mexico does not have a free trade agreement, such as China, which have been in force since April of this year.
Despite this tariff measure, Vietnam and Malaysia are countries with which it has a free trade agreement: the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Considering Quesada's words, the market share of steel imports from China, Vietnam and Malaysia in Mexico was 16.8 percent, surpassing South Korea, which is in second place with 16.2 percent. The United States contributed 31.6 percent of the total.
In the first 10 months of 2024, the two winners in steel sales to Mexico are Vietnam, which has a market share of 5.6 percent, and Malaysia, with a market share of 1.9 percent.
The two biggest losers were China, with a lower market share of 9.3 percent, and Germany, which has 2.9 percent of market share through October of this year.