Chinese export tax rebate poses threat to Latin American steel sector

Thursday, 25 June 2020 17:42:22 (GMT+3)   |   Istanbul
       

The Latin American Steel Association (Alacero) has stated that the increase in the Chinese export tax rebate poses a threat to the steel industry in Latin America.

It noted that, while the coronavirus pandemic has caused a decrease in demand in markets globally, Chinese exporters have increased their export tax rebate for 1,464 products since March 20. The export tax rebate rate for steel products such as wire rod went from 0 percent to 13 percent and that for hot rolled alloy coils rose from 10 percent to 13 percent.

As China’s surplus is sold in Latin America at prices with which domestic producers are unable to compete, the increase created unfair conditions, which can cause plant shutdowns and job losses in Latin American steel industry, Alacero indicated. “The Chinese government has the financial capacity to subsidize steel, impacting Latin America, especially now that many doors in other places in the world are closed to them,” the association said.

According to Alacero, by implementing more effective customs inspection, quality assurance policies required for imports, and the enforcement of all instruments established by the WHO, the Latin American steel industry can be protected.

The low activity amid the impact of the coronavirus has led to oversupply in Latin America, with inventory 20 million mt higher than in the previous year. “In this context, we confirm that we have sufficient capacity in Latin America for the future growth of the industry without need for imports. In Mexico, a new hot rolling capacity is being incorporated,” said Francisco Leal, director-general of Alacero.


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