Subsidy‑Savaged Steel Sector

Ezequiel Tavernelli, executive director of Alacero, highlights how Chinese steel benefits from deeply entrenched and systemic subsidies, allowing it to be sold below cost in Latin America. He argues this unfair pricing jeopardizes the region’s strategic steel sector and threatens 1.4 million jobs across the value chain.

Excess Capacity Eclipses Essential Output

China’s steel overcapacity is projected to reach 721 million metric tons by 2027, as noted by OECD official Anthony De Carvalho. This glut floods global markets, distorting prices and undermining Latin America’s small and medium producers.

Tariff Turbulence Compounds Crisis

US steel tariffs of 25 % have diverted Chinese and other excess steel away from the US toward Latin America. Tavernelli warns this influx worsens market pressure on regional producers already struggling with unfair competition .

Job‑Loss Jitters Intensify

Latin America’s steel sector supports an estimated 1.4 million direct and indirect jobs. Tavernelli warns unchecked imports are triggering plant closures, most notably the shuttering of Chile’s Huachipato blast furnaces, and potentially triggering a regional industrial crisis.

Environmental Efficiency Elevates Edge

Despite economic challenges, Alacero stresses Latin American steel mills offer a sustainability advantage, emitting just 1.6 metric tons CO₂ per metric ton produced, below the global average of 1.8 metric tons and significantly lower than China’s ~2.1 metric tons.

Policy Pivot & Partnership Proposal

Tavernelli advocates regional policy cohesion centered on trade defence, local value chain development, and collaboration with the US to secure exemptions or defend against trade diversion. He emphasizes cooperation to counteract global market distortions.

Decarbonisation Demands Direct Funding

Alacero notes that Latin American steel cannot reach net‑zero by 2050 without substantial government funding. Unlike Europe, which has pledged $41 billion in state aid, Latin American governments have yet to commit to such support.

Coordination & Competitiveness Critical

Tavernelli concludes that regional unity is essential to sustain steel production, preserve jobs, and compete globally. He reiterates that Latin America’s environmental performance, coupled with strategic policymaking, can reinforce its standing in global value chains.

Key Takeaways

• Chinese steel floods Latin America with subsidy‑driven low prices, risking 1.4 million jobs across the regional steel value chain.

• Latin American producers emit only 1.6 metric tons of CO₂ per metric ton of steel, below global average, offering a sustainability advantage.

• Regional coordination, trade defence, and government decarbonisation funding are essential to safeguard competitiveness and employment.