Latam steelmakers see threat from China

* Regional companies concerned over imports from China

* Industry seeks state protection from “predatory” rivals

* Region’s demand seen rising 8.4 pct in 2011 to 64 mln T

By Eduardo Garcia

BUENOS AIRES, Oct 26 (BestGrowthStock) – Latin American steelmakers
see an increasing threat from cheap Chinese imports and want
governments in the region to take steps to guarantee fair play,
a regional chamber said on Wednesday.

Regional powerhouse Brazil introduced measures last week
aimed at curbing imports of cheap steel products made in China
that Brazilian steelmakers complain are flooding the market.

Daniel Novegil, chief executive of Latin American
steelmaker Ternium (TX.N: ) told reporters that the woes of
Brazilian steel firms are shared by companies throughout the
region, and that governments should do more about it because
jobs are at risk.

“To the extent that we acknowledge that employment is
important for our countries we’ll find a common agenda to
defend ourselves from competitors who are predatory, who are
disloyal,” said Novegil, whose company operates in Argentina,
Mexico, Colombia and Panama.

He spoke during a conference organized by the Latin
American Iron and Steel Institute, or ILAFA.

According to the group, demand for steel is growing rapidly
in the region, but the output of Latin American steelmakers is
not rising as fast because of an influx of imports from China.

ILAFA data shows that between 2008 and 2010 steel imports
in Brazil soared 250 percent, whereas exports rose 70 percent,
an unbalance that is “echoed in the region” said Andre Gerdau
Johannpeter, CEO of Brazilian steelmaker Gerdau (GGBR4.SA: ).

He said that Latin American steelmakers are competing on an
uneven playing field with their Chinese rivals and that local
governments should guarantee “transparent and fair rules.”

“There are countries that give more subsidies; borrowing
costs are subsidized, the governments control the companies,
production does not follow laws to protect the environment,”
Gerdau told reporters.

“It’s possible to compete with privately owned companies,
but it’s very difficult to compete against governments,” he
said, adding the problem will likely worsen as new projects
come on stream in Brazil.

Gerdau told Reuters on Monday that plans by the Brazilian
government to impose minimum import prices for 16 types of
steel products such as hot-rolled and cold-rolled steel, wire
rods and rebar are steps in the right direction.

ILAFA sees demand for steel increasing by 8.4 percent in
2011, while the World Steel Association has forecast that
growth of global steel demand will slow to 5.3 percent in 2011
from 13.1 percent this year. [ID:nLDE69P1J5]

The $500 billion steel industry, a bellwether for the
broader economy, profited in the second quarter from a strong
auto sector and booming Chinese demand, but since then the
latter in particular has cooled.

Iron ore and coal costs rose, but steel prices did not, and
globally the fragmented steel sector is running at about 70
percent to 75 percent of capacity.
(Editing by Steve Orlofsky)

Latam steelmakers see threat from China