A trade dispute between China and Peru is brewing over anti-dumping measures on a key steel product, “alambrón,” used extensively in both manufacturing and construction.Two of China’s largest steel exporters, Angang Steel and Benxi North Steel Rolling, are challenging the proposed tariffs, arguing they violate the existing China-Peru Free Trade agreement and could disrupt the Peruvian construction sector. The case, currently before Peru’s consumer protection agency, Indecopi, highlights ongoing tensions in international trade and the complexities of enforcing fair trade practices within established agreements.
Two major Chinese steel exporters are challenging anti-dumping measures proposed by Peruvian authorities, arguing the tariffs could violate a free trade agreement between the two countries and disrupt the construction sector. The case centers on a specific type of steel bar known as “alambrón,” crucial for both manufacturing and construction in Peru.
Angang Steel and Benxi North Steel Rolling, both based in Liaoning province, have formally engaged with Peru’s consumer protection agency, Indecopi, through legal representation. While aligned with domestic importers in seeking a resolution, the Chinese firms are presenting distinct legal arguments. This dispute highlights the complexities of international trade and the potential for friction even within established free trade agreements.
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Concerns over Trade Agreement
Angang Steel, also known as Ansteel, ranks as the world’s third-largest crude steel producer, with an output of 59.55 million tons in 2024, according to data from the World Steel Association. Benxi North Steel Rolling operates in the same Chinese province and has been the subject of merger discussions with Angang in recent years.
Represented by the law firm Stucchi Abogados, the companies argue that the proposed anti-dumping duties violate the China-Peru Free Trade Agreement, which has been in effect since 2010 and was recently updated. According to attorneys Pierino Stucchi and José Antonio Bezada, the conditions for applying such measures, as outlined in the trade agreement, have not been met in this case.
A key point of contention is the scope of the product being investigated by Indecopi. “The determination of the investigated product is very broad,” Bezada explained. “It evaluates applying anti-dumping duties to both low and high carbon steel with diameters of 5.5 mm and 16 mm, but CAASA, according to the information they provided and their own technical specifications, only produces low carbon steel with diameters ranging from 5.5 mm to 8 mm.”
The lawyers contend that applying tariffs to products not manufactured by domestic producers could negatively impact steel prices for the construction sector, a concern also voiced by national importers. However, CAASA maintains it currently manufactures corrugated steel rebar measuring ⅝ inches, which is nearly 16 mm, for the construction industry, and has the capacity to produce the 16 mm diameter if demand arises.
Exportadores chinos aseguran que CAASA no produce lo suficiente para abastecer al mercado peruano que demanda alambrón. Foto: GEC.
The Chinese exporters also argue that Indecopi incorrectly assumed there were no differences in production processes between China and Peru that would affect manufacturing costs and explain price discrepancies. They claim this is not the case, citing significant variations in production methods.
Chinese steelmakers primarily utilize the “BF-BOF” process, which uses iron ore and coking coal as raw materials. According to the Chinese firms, this method generates more than three times the carbon dioxide emissions compared to the “EAF” process, which they claim is used by domestic industries like CAASA.
“Using BF-BOF, production costs are 10% to 50% lower than with EAF,” Bezada asserted. “When analyzing causality, it must be considered that the domestic product in this sector uses a more expensive method.”
“The TLC with China allows for the application of measures when dumping is proven with damage to the national industry. This is part of the commitments, but the TLC does not establish, and that would be the violation, imposing measures when the national product does not exist or damage has been caused by the decisions of the local company,” Stucchi emphasized.
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Methodological Shift Questioned
As previously reported by Gestión, CAASA altered its primary method for demonstrating dumping during the Indecopi investigation. Initially, the company proposed using Ecuador as a comparative example.
“Initially, everything indicated that Ecuador was not suffering from dumping practices, but as the investigation progressed, it was verified that it was. That is why we proposed to Indecopi to evaluate another methodological alternative: cost reconstruction,” explained Robert Venero, a partner at the Diez Canseco law firm, which is leading CAASA’s case.
The Chinese exporters argue that this proposed change would undermine the initial accusation, echoing concerns raised by domestic importers.
“Time has been wasted on Indecopi, and companies have been affected in the process. Of course, the price can be reconstructed, but we must consider the severity: so far, free trade has been blocked without clear justification,” Stucchi claimed.
The lawyer referenced Indecopi’s July decision to apply provisional anti-dumping duties for four months on Chinese steel imports. After the legal deadline expired, the agency lifted the tariffs.
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Seeking Resolution
Both CAASA and importers like Prodac indicated they would likely appeal Indecopi’s decision, which is expected by January. The resolution will be a first-instance ruling.
The legal representatives for Stucchi Abogados stated that the Chinese exporters seek a dismissal of the case. Alternatively, Bezada clarified that they would accept differentiated treatment, arguing there is clear evidence they are not engaging in dumping practices and would accept individual anti-dumping duties “consistent with their economic activity.”
USOS DIVERSOS. The steel imported from China to Peru is used to produce springs (used in mattresses), chains, hooks, and various reinforcements in civil works.
“We firmly believe that this practice does not occur here, but in the hypothetical event that measures are to be imposed, we firmly state that the situation of Angang and Benxi is different from other companies,” Bezada said.
The lawyers assert they have demonstrated to Indecopi, through oral hearings and official documentation, that both companies do not discriminate in pricing between domestic sales in China and exports to Peru.
