Speaking at the “Unfair Trade and its Impact on Latin America” event organized by the Latin American Steel Association (Alacero) and the National Chamber of the Iron and Steel Industry of Mexico (Canacero) held last week in Monterrey, Mexico, Anthony de Carvalho, head of the steel unit at the Organization for Economic Co-operation and Development (OECD), stated that the Latin American steel industry is in a critical state due to growing global overcapacity and market distortions both generated by subsidies from China, which are 10 times higher than in OECD member countries, and subsidies from other Southeast Asian economies.
Projecting that global overcapacity will reach 721 million mt in 2027, Carvalho said, “It could wipe out small and medium-sized steel industries in every country.” Despite that, there plans to continue adding production capacity, mainly in China, India and Southeast Asia, he noted.
The OECD official went on to state that unfair competition from China, where domestic steel demand has declined, leading the country to increase exports, not only affects the steel industry but also impacts key sectors such as automotive and household appliances. He pointed out that in 2024 China exported more than 110 million mt of finished and semi-finished steel, 14.2 million mt of which were destined for Latin America.
“Steel industries with market-based practices are suffering from the lack of a level playing field. We are experiencing overcapacity around the world. This is reflected in plant closures, thousands of layoffs, and economic disruptions. We are facing an existential crisis for the steel industry, and we must take action to preserve the viability and sustainability of the business,” Carvalho concluded.