News Room - Steel Industry

The yuan's devaluation artificially lowers the price of Chinese products in foreign markets and will adversely affect Mexico's steel industry by increasing imports of that product from the Asian giant, the Mexican Iron and Steel Industry Chamber, or Canacero, said.

"The impact on the Mexican economy of (last week's devaluation of around 4 percent against the dollar) will significantly affect industries like steel," the chamber said in a press release.

The currency move will exacerbate "the problem of steel being imported under unfair conditions," Canacero added.

Imports of Chinese laminated steel to Mexico had already risen sharply prior to the recent devaluations of the yuan, rising 112.5 percent between January and June compared with the same period of 2014.

That caused Mexico's steel trade deficit to rise to 4.65 million tons through June 2015, up 55.8 percent from the same period of 2014, the chamber said Tuesday.

"We need to strengthen current measures and continue to take action so our domestic producers are not harmed by decisions made abroad - decisions by governments that adopt policies for the wellbeing of their own nation," it said.

The new currency policy put in place by the People's Bank of China (central bank), which last Thursday lowered the reference rate around which the yuan can trade to 6.401 per dollar, "jeopardizes the sovereignty of a strategic sector," Canacero said.

It said the Asian giant is seeking to ensure "a dominant position" and influence prices "almost unilaterally," adding that the currency move is a blow to Mexico's productive sector and poses a "threat (to) more than 70 percent of Mexican exports to the United States."