By Guilherme Baida

May 22, 2018 - Latin American countries need to work in a coordinated manner to keep the region from being oversupplied by steel imports, regional steel association Alacero said Monday.

"The steel industry is at a crossroads where, on the one hand overcapacity, particularly in China, continues being a risk for the stability of the market and the operation of companies and on the other, the application of protectionist countermeasures (US Section 232, EU and Turkish safeguards) continues distorting the flows trade and causing a trade deviation that will seriously affect the regional market," Alacero said in a statement.

Latin American governments must unite to ensure a level playing field and fair trade in the region's market is maintained, Alacero said.

"Structural changes in the steel industry and its negative effects will be faced," it said. "A coordinated action between governments [of the region] and industry to address the problems faced by the global and regional steel industry."

The steel association is asking Latin American governments to apply agile and efficient response mechanisms to the negative effects of excess production capacity, such as the application in real time of a customs monitoring system of imports and exports to avoid trade diversion.

Alacero said the main economies of the world are implementing measures to counteract the negative effects caused by the existing excess capacity. "These barriers will undoubtedly produce what we call a trade deviation that will further affect the Latin American steel market," it added.

With the G20 Meeting of Leaders 2018 to be held in Argentina in the first week of June to discuss steel over capacity in the world, Alacero called on governments "to ratify their political commitment to solve the crisis of the steel industry." 

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