MEXICO CITY: Investments of some US$15bn by Mexico’s steel sector are under threat from Chinese dumping and a global production surplus.
The warning, from Alonso Ancira, the outgoing president of industry chamber Canacero, follows unease over Chinese imports that doubled in 2014, as well as increased purchases from Japan and South Korea, with imports taking up two-thirds of demand growth, according to Canacero figures.
The investments are planned over the coming two years at least, with US$5bn probably already lost, Ancira told at the chamber’s Mexico City offices. The figure mostly includes early stage or planned projects, rather than those nearing completion, the conference heard.
Global overcapacity totaling 700Mt, largely in China, is also distorting markets and putting pressure on prices. “We’re in a critical situation,” Ancira said.
The sector is working with Mexican authorities to limit dumping, with 24 antidumping probes already launched.
A working group has also been established with the finance ministry with the aim of controling temporary imports, which have risen following increased vigilance of final imports, according to a Canacero statement.
An 11.5% or 62bn-peso (US$4.16bn) budget cut by Mexico’s state oil firm Pemex for 2015 due to tumbling oil prices will also impact Mexico’s steel industry, incoming Canacero president Guillermo Vogel told the conference.
