Mexican Steel Chamber Defends Need For Protection Against China

7 April 2016

Two weeks before the High-Level Symposium on Excess Capacity & Structural Adjustment in the Steel Sector to be held in Brussels, the president of the Mexican steel chamber Canacero defended the need for short- and medium-term measures to protect the world from the flow of steel products originating in China.

During Canacero's convention Tuesday, Guillermo Vogel said Mexico, as well as many other countries, is suffering from the "exponential export flows [of steel products] in unfair conditions," which caused a strong drop in domestic steel prices.

"[This] resulted in industries operating at loss, threatening the subsistence of highly competitive companies," he said.

Safeguards, antidumping duties and minimum prices for steel imports were some of the measures Vogel cited that were taken by countries to protect their steelmaking sectors.

Nevertheless, the reduction of Chinese steel production by 100 million to 150 million mt between 2016 and 2020 is not sufficient to solve the unbalance the excess capacity has generated, he said.

"The real solution is that China eliminate internal subsidies, all the government intervention, support from local and federal governments and really work as a market economy and stop supporting companies that operate at loss," he said. "This is a solution that will take years and we need to define specific measures in the short term to avoid permanent damage to the world steel industry."

While these adjustments are not performed, for the short term Vogel suggested China could apply a self-restriction on exports, "ensuring market conditions" or the "immediate implementation of actions to close its access to various world markets."


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