By Edelmiro Franco V. | 2025-02-10

BOGOTA -- Unfair competition from Chinese steel is crippling Colombia's steel industry and reports now suggest that material imported from the country and used in Bogota's future subway doesn't meet international standards, raising serious safety concerns for the project.

The use of substandard materials could endanger thousands of lives, David Barros, director of the Colombian Chamber of Steel (Camacero), warned.

"We are deeply concerned about Chinese-origin steel. An immediate technical verification and evaluation are necessary," he told La República on January 30.

Barros urged the creation of a specialized committee to ensure the reliability of materials used by the Chinese consortium Metro Línea 1, led by state-owned firms China Harbour Engineering Company (CHEC) and Xi'an Rail Transportation Group.

Among Camacero's top concerns are structural integrity, longevity and overall safety.

"Our complaint is centered on these risks. We need urgent action to verify the quality of the materials," Barros emphasized.

Construction of the subway, which began in 2020, is expected to end in 2028.

But the project is embroiled in controversy over the consortium's delays in construction and unpaid obligations to local contractors.

Chinese 'dumping'

Barros' concerns add to the crisis facing Latin America's steel industry, which has been struggling with a flood of steel that China "dumped" on the region -- i.e., sold for below cost.

The sector has suffered job losses and factory closures. A grim reminder came in September when Huachipato, Chile's largest steel plant, shut down because of unfair Chinese competition.

Major industry players -- including Acerias PazdelRio, Alumina S.A., Colombia's National Association of Industrialists (ANDI) and the Latin American Steel Association (Alacero) -- have repeatedly warned about the deepening crisis.

Their concerns were echoed at the National Steel Forum in Tunja last August 12, where industry leaders called for stronger protectionist measures to counteract the impact of surging steel imports, particularly from China.

The Colombian government responded by raising tariffs on Chinese steel to 35%, the maximum allowed by the World Trade Organization (WTO). This measure, implemented on October 18, will remain in effect for two years and primarily targets unfair competition from China and Russia.

However, additional measures are needed to ensure the survival of Colombia's steel sector, industry watchers argue.

Colombia's imposition of additional tariffs on Chinese steel follows similar moves by Argentina, Brazil, Chile, Honduras, Mexico and Peru, which have raised duties to counter unfair competition.

Predatory pricing

The steel market is facing a complex moment both locally and globally, Daniel Rey, executive director of the Colombian Committee of Steel Producers at ANDI and professor at Javeriana University in Bogota, told Entorno.

Predatory pricing -- particularly from China -- is putting immense pressure on domestic producers, he warned.

Dumping already has jeopardized about 50,000 direct and indirect jobs in Colombia's steel industry. China, which produces almost 54% of the world's steel, heavily subsidizes its exporters. They can sell for 20% to 30% less than local producers charge and make fair competition almost impossible, according to the analyst.

China's economic slowdown and the collapse of its real estate sector have further fueled its overproduction of cheap, subsidized steel, flooding global markets and deepening the crisis for Latin American industries.