For Official Use DSTI/SU/SC(2007)25 DSTI/SU/SC(2007)25 For Official Use Organisation de Coopération et de Développement Economiques Organisation for Economic Co-operation and Development 14-May-2007 English text only DIRECTORATE FOR SCIENCE, TECHNOLOGY AND INDUSTRY STEEL COMMITTEE LATIN AMERICAN STEEL INDUSTRY 17 May 2007 Presentation by Mr. Luis Sotomayor, ILAFA. Steel Committee meeting on 17 May 2007, Istanbul, Turkey. Anthony de Carvalho, Administrator, Structural Policy Division Tel: +(33-1) 45 24 93 77, Fax: +(33-1) 44 30 62 63, E-mail: Anthony.decarvalho@oecd.org English text only JT03227045 Document complet disponible sur OLIS dans son format d'origine Complete document available on OLIS in its original format
Latin American Steel OECD / IISI Steel Conference Latin American Iron and Steel Institute ILAFA Istanbul,Turkey May, 2007 III. A Balanced Steel Market IV. A Competitive V. Concerns VI. Final Comments 2
Outlook 2006-2008 Macroeconomic facts: General Economic Indicators (% yoy) 2006 2007 (e) 2008 (f) Gross Domestic Product (GDP) 5.3 4.8 4.1 Industrial Production (IP) 5.5 5.5 4.9 Capital Formation: Equipment and Machinery 5.0 11.0 5.7 Construction 5.7 6.3 4.8 Imports 15.1 12.2 9.4 Exports 8.4 8.3 7.4 Source: ECLAC 3
Main Figures Finished Steel Year Production Imports Exports ASU* 2005 51,0 9,3 11,4 48,6 2006 52,9 12,2 12,8 52,4 2007 58,6 12,7 14,5 55,7 * Deducting steel receipts Source: ILAFA Latin American Finished Steel Production Million metric tons 27, 55 27,95 27, 93 30, 00 25, 00 21, 30 20, 36 22,85 20, 00 15, 00 10, 00 2,07 2, 15 2,21 5, 00-2004 2. 005 2006 Longs Flat s Seamless Tubes 4
Latin American Finished Steel Production By Country 2006 mmt 0.7 3.8 0.4 5.3 0.1 15.6 23.5 1.6 1.5 Argentina Cuba Brazil Chile Colombia Mexico Peru Venezuela Ecuador III. A Balanced Steel Market 5
Equilibrium between Demand and Supply Mmt 80,0 60,0 40,0 20,0 - Apparent Steel Use Finished Steel Production 2000 2002 2004 2006 2008 A Balanced Finished Steel Trade Finished Steel Imports Finished Steel Exports Mmt 15 10 5 0 2000 2002 2004 2006 2008 * Semis not included 6
III. A Balanced Steel Market IV. A Competitive A Competitive ILAFA members WTO Natural Resources Environment Modernization 7
Latin American Steel Consolidation Rank Company MMt Share Accum. 1 Arcelor Mittal 17.5 28% 28% 2 Ternium 9.8 16% 43% 3 Usiminas-Cosipa 8.7 14% 57% 4 Gerdau Group 8.2 13% 70% 5 CSN 5.1 8% 78% Others 13.4 22% 100% Total Latin America 63 III. A Balanced Steel Market IV. A Competitive Business V. Concerns 8
Concerns ILAFA members do not receive subsidies Latin America cannot compete with unfair trade Growing Chinese exports to the region Volume: A Growing Steel Trade Deficit Latin American Steel Trade with China (Tons, 2006) Products Latin American Trade Imports Exports Balance Chapter 72 1,566,122 614,591 (951,531) Chapter 73 843,716 41,716 (802,000) Indirect steel trade* 2,545,469 73,790 (2,471,679) TOTAL 4,955,307 730,097 (4,225,210) * Steel contents Source: China-Latin America Steel Trade Statistical Yearbook 2004-2006. ILAFA (www.ilafa.org) 9
Speed: Chinese exports to Latin America are growing faster than to the rest of the world 2004=1,00 6,00 Index 5,00 4,00 3,00 2,00 1,00-2004 2005 2006 World without Latin America Latin America Future: Monthly Evolution and Trend of Chinese Exports to Latin America 400.000 350.000 Total 2006: 1,566,122 300.000 250.000 Forecast 2007 Tnos 200.000 150.000 100.000 50.000 Historical Data 2006 Total 2007: 3,600,000 - January February March April May June July August September October November December January February March April May June July August September October November December Month 10
III. A Balanced Steel Market IV. A Competitive Business V. Concerns VI. Final Comments Final Comments Latin American steel companies aligned with world industry trends, committed to WTO rules, privatized and without subsidies A balanced steel market A region that will not cause injuries to other steel markets Constructive and permanent dialogue could prevent Latin America and China trade disputes 11