The recognition of China as a market economy will likely have adverse effects on the Brazilian steel sector, an IABr executive told participants of the Alacero conference, which is being held in Rio de Janeiro from October 25-26.
According to Alexandre Lyra, president of the IABr directing council, over 30,000 job positions would be lost in Brazil by 2020 if China becomes a market economy. IABr is Brazil’s steel association.
According to the IABr executive, who is also the president of Vallourec in Brazil, granting a market economy status to China will make it more difficult for Brazil to apply anti-dumping duties, since Chinese prices would be considered as the standard price in export comparisons.
IABr’s findings came after the local steel association hired a consulting company to research the potential impacts of the situation on the Brazilian economy and steel sector.
Further, Brazil’s industrial segments that currently apply antidumping measures on Chinese exports could see even higher losses, according to Lyra, adding that IABr estimated about 800,000 job positions would then be lost.
Lyra said Brazil’s steel consumption per capita should end 2016 at 100 kg/person, same level as seen in 1980.
“In the same period, China’s [per capita steel consumption] grew 14 times, as for Korea, it was a 7 times growth,” he said.
“We’re discussing how to retake the growth, but the challenges are big. Risks coming outside Brazil are worrying. The risk of losing competiveness is worrying,” he said.