More than 700 delegates were in Buenos Aires, Argentina, earlier this month, attending Alacero-56 (The Latin American Steel Conference).
The gathering was officially opened by Martin Beradi, president of Alacero and CEO of Ternium Siderar (Argentina) who highlighted issues of concern to his audience that would be discussed over the following two days.
Beradi told delegates that the current crisis affecting the global steel industry was rooted in the overcapacity problem in China, which he claimed was a consequence of the country’s centrally planned economy.
The overcapacity in question, said Beradi, currently stands at 425Mt, which is 6.5 times the annual output of Latin America.
“Faced with excess output and the inability to close plants due to political and social reasons, Chinese steel companies – state-owned and governed by a logic that does not respond to a market economy – have aggressively sought new destinations in international markets; even drawing upon unfair trade practices,” argued Alacero, encapusulating the problem in just one sentence.
The Latin American steel industry is suffering from production line closures, discouraged investment, financial problems and job losses, thanks to China dumping cheap steel on its doorstep. According to Beradi, the penetration of Chinese products all along the value chain is replacing intra-regional trade and eroding regional integration. He called on Latin American governments to prioritise the problem of unfair trading and strongly consider the risks of bestowing market economy status on China in December 2016.
Alacero-56 focused on understanding the economy of the region and identifying how a context of economic recession is affecting customers and suppliers. It also set out to improve delegates’ knowledge of the regional steel industry and share strategies developed in the region.
Speaking at the conference, Ternium CEO Daniel Novegil said it was important to build more integrated value chains in Latin America, strengthen local businesses and exploit the industrial network of each country. “Investment in R&D and education are also key to the development of industries that generate quality jobs and productivity,” he said.