By Giselle Alzate | 2024-07-18

BOGOTÁ -- The Colombian steel industry is facing a crisis due to the "intensification of unfair competition" from steel imports from China and Russia.

Fabio Galán, president of the Colombian steel company Paz del Río, stated in a news conference with local media that steel imports from China and Russia threaten to close his company, potentially costing about 21,000 jobs.

"We are highlighting the intensification of unfair competition and warning about its severe impact on employment," he stated on July 14.

His company is currently protecting jobs at all costs, "even if it means incurring significant economic losses," he said.

"However, the situation has deteriorated, and we can't handle it on our own," he said.

Steel imports, primarily from China and Russia, surged by 75% in the first half of this year compared to the same period in 2023, said Galán.

Predatory pricing

Since last year, his company has urged the Colombian government to implement tariffs on steel from China and Russia, he said.

"We urge Colombia's government to follow the lead of other nations in preventing unfair competition practices and protecting national employment. It is time to take a stand as a country and defend Colombian jobs," he stated.

Colombian authorities are considering raising tariffs from the current 5%, with Paz del Río advocating an increase to 35%.

If Colombia raises tariffs, it would follow the example of Chile, Mexico, and Brazil, which already have increased tariffs on steel from China.

"We are impacted by the high input costs over the past two years and the predatory pricing from countries with surplus production," remarked Galán.

The Chinese economic crisis and the abrupt slowdown in the real estate market have led to an overproduction of Chinese steel, heavily subsidized by the Beijing government, being "dumped" on the international market at prices significantly below production costs.