In an interview with Forbes Peru, Marcos Matiello, the CEO of Siderperú, highlighted concerns over the growing volume of steel exports from China and its potential impact on the Peruvian market. While the situation in Peru has not yet escalated to the levels seen in Brazil, where the government has already implemented higher import taxes and quotas to manage the influx of cheaper steel, Matiello's concerns are rooted in the near future. As China's domestic steel market remains depressed, the country is expected to produce an excess of steel, with an estimated 100 million metric tons of steel in 2025 that will primarily be exported to global markets.
Despite these looming concerns, the situation in Peru is still manageable, as imports currently account for only 10% of the nation's domestic consumption. However, Matiello acknowledges that the pressure from increased Chinese exports could become a significant challenge, particularly in a market already facing domestic production capacity constraints. The primary worry is the competitiveness of Chinese steel, which could force local producers, such as Siderperú, to adjust pricing strategies, potentially undercutting domestic steel prices.
Looking ahead to 2025, Siderperú is preparing to increase its production capacity by 12% compared to 2024. This boost in capacity is facilitated by a $20 million investment in the technological upgrade of its rolling mills at the company’s Chimbote plant. These upgrades include advanced consulting services aimed at improving the plant’s performance and ensuring that Siderperú remains competitive amidst external pressures. The investment is a part of the company’s broader strategy to modernize its facilities and maintain its position as a leading steel producer in Peru.
While the growth in China's steel exports presents significant challenges for countries like Peru, Siderperú’s proactive approach, including technological advancements and capacity expansion, will be critical in maintaining its competitive edge. The company’s efforts to modernize its operations aim to better meet domestic demand and position itself as a more resilient player in a global steel market that is increasingly influenced by China’s excess production.
Matiello's comments underscore the broader concerns of steel manufacturers across the world, who are grappling with the impacts of a global oversupply, particularly from China. As the situation develops, the strategies adopted by companies like Siderperú could offer valuable insights into how steel producers can navigate the challenges posed by foreign competition and maintain sustainable operations in a highly competitive industry.
