The Latin American steel industry is being affected by the increase in Chinese export tax rebates for steel products, according to the Latin America Steel Association (Alacero).
Since March this year, Chinese exporters have increased their tax rebate for 1,464 steel products, Alacero said in a press release on Friday without disclosing the names of the export companies.
Between January 2019 and March 2020, the tax rebate rate for Chinese exports of steel products such as wire rod increased from 0pc to 13pc and went up from 10pc to 13pc for hot-rolled alloy coils, Alacero noted. This increase has impacted exports of hot-rolled products and wire rod, generating an advantage of $10-15/ton ($11-16/mt) in exports.
The association indicated that China sold its surplus to the Latin American region at prices which were much lower than domestic producers, making the latter unable to compete. As a result, imports of steel products under these unfair conditions could cause steel plants to shut down and lay off people in the Latin American region.
However, by implementing more effective customs inspection and quality assurance policies required for imports, the Latin American steel industry could be protected, Alacero added.
Latin American crude steel production fell by 34pc to 3.5mn mt in April this year compared the same month the prior year due to the effects of the COVID-19 pandemic. Crude steel output reached 5.3mn mt in April 2019.