The growing import of Chinese steel into Latin America is putting pressure on local markets and industry, which say they are competing on an unequal playing field due to government subsidies and artificial prices, and has slowed the sector’s growth just as the region faces increased demand for construction supplies.
According to Ezequiel Tavernelli, president of the Latin American Steel Association (Alacero), the problem lies in the fact that we are facing “a monster that competes under other rules” and that has “a tangle of subsidies that range from the acquisition of raw materials, through the financing of working capital, subsidized and very long-term rates, (even) financing companies that make losses.”
“We are no longer competing companies with companies, we are competing companies against a State and there is no way to compete against a State,” Tavernelli told EFE.
In 2024, according to Alacero data, global demand for crude steel reached 1,870 million tons, while China produced 1,005 million, a difference that translated into a surplus capacity of 249 million tons available to be placed in international markets, a volume that exceeds the productive needs of several regions of the world.
“The OECD informs us that with the investments that China has launched by 2027, which began to invest in Southeast Asia, mainly in Malaysia and Indonesia, this excess capacity will exceed 720 million tons,” he revealed.
Chinese steel in Latin America
Alacero points out that in Latin America steel imports represent 39.7% of total consumption in 2025, that is, four out of every ten kilograms of steel consumed are imported. China represents 45.4% of these imports.
Between January and October 2025, according to data from the Government of China, the country exported more than $59,316 million in steel and $87,522 million in steel products. Of that total, 3,323 million came from shipments to Brazil, 1,612 million from Chile and 345 million from Argentina.
In Argentina, Chinese steel imports until October exceeded the 248 million dollars recorded in 2024. The Metallurgical Workers Union (UOM) told EFE that since the beginning of President Javier Milei’s mandate, in December 2023, around 20,000 jobs have been lost in the different branches of the union.
For the UOM, the increase in Chinese steel imports is just one of the factors influencing the crisis in the sector, amid the fall in economic activity that has reduced demand in key areas such as construction and the automotive industry.
The steel industry of Brazil, the largest Latin American economy, warns of a “risk of collapse” given the record volume of steel imports, mainly from China (64%), which is why the country adopted a 25% tariff on steel until 2026.
According to the Brazilian Steel Institute, the sector’s association, predatory practices have caused the loss of more than 5,000 jobs and cut more than 450 million dollars in investments.
In Chile, Chinese steel caused the closure of the Huachipato steel plant in August 2024, the country’s main producer, after a serious financial crisis and years of losses.
The company accused China of “unfair competition” and not even the surcharges imposed by the government of the progressive Gabriel Boric on these imports could stop the company’s decline.
Companies against a State
In Mexico, the entry of steel from China has also raised alarm bells, leading the country to impose tariffs of up to 50% on products originating in Beijing, measures that are added to the 25% tax applied since August 2023 to various steel imports and which has been ratified by the Government of Claudia Sheinbaum.
Colombia, another notable case, has accumulated 37 consecutive months of declines in steel production, according to the National Administrative Department of Statistics, facing a price gap compared to imported steel of up to 40%.
To protect the local steel industry, in 2024 the country imposed tariffs of 14.5% on imports of corrugated steel bars from countries in the Andean Community, while countries without trade agreements, including China, imposed a 30% tax.
A tariff defense
Tavernelli warns about the focus of exports on raw materials and not on value-added products, both in steel and other products, a domino effect that leads him to talk about the “deindustrialization” of the region.
According to the expert, China’s strategy is no longer limited to the export of direct steel – such as coils or rolls – but has moved towards indirect steel incorporated into manufactured goods, such as electric cars, refrigerators and washing machines.
“They end up telling you: ‘don’t produce the car, I’ll send it all to you’ (…) What the government of each country does not realize is that they are breaking the fabric of social development,” he said.
In this context, it raises the need to level the playing field through a tariff defense similar to that applied by the United States or the European Union, at a time when the region faces growing demand for infrastructure and there is debate about who will capture its future growth.
With information from EFE.
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