The Latin American Steel Association (Alacero) said the world steel industry is currently undergoing major structural changes, which is affecting Latin American steelmakers and that following a major upswing in 2017, the regional steel market is facing a high-risk scenario. For the most part, China is behind overcapacity problems and protectionist and countermeasures in various countries around the world. The steel trade body, LatAm, has called for collective action by regional governments to ensure fair trade space in the regional steel market.
According to the Organisation for Economic Co-operation and Development (OECD) estimates, global steel capacity stands at around 600 million tonnes, led by China. To date, no solution to this problem has been found. On the other hand, the announcement of new capacities also makes the issue worse.
The trade defense mechanisms implemented by the World Trade Organization (WTO) have not yielded positive results so far. This has led to the development of various trade barriers that tend to deform global steel trade. Alacero noted that these barriers will create a trade divergence that will affect the Latin American steel market.
According to Alacero, coordinated action by governments and industry is needed to address the issues facing the global and regional steel industry. Further strengthening WTO trade defense instruments and an effective customs monitoring system will help minimize trade routing. Moreover, Latin American governments need to work together to present a common defense in international forums where industrial issues are discussed. Alacero also recommends the development of a permanent system for monitoring the industrial situation in the main countries.
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