Tenaris sees consolidation in Chinese steel tube sector
Sunday, 08 Nov 2009
Dow Jones quoted a senior executive at steel tube maker Tenaris said reported that China's subsidies for steel tube exports are not going to be sustainable and there will likely be a wave of domestic takeovers there.
Mr Guillermo Vogel VP finance of Tenaris said “China manufacturers have gone to the international markets with non market principles. Chinese exporters have the advantage of an undervalued currency, heavy subsidies and a 13% tax rebate on exports.”
Mr Vogel said the number of unfair trade cases being brought against China is increasing in countries such as the US, Europe, Canada, Mexico, Argentina and Russia, pushing Chinese companies a little bit backwards.
The executive said that in today environment, he does not believe that Chinese companies have competitive advantage in terms of costs and there is likely to be consolidation. Mr Vogel said "China is a very fragmented and we are going to see a restructuring and a consolidation there."
Mr Alejandro Lammertyn the firm's commercial director said the Chinese market, boosted by a mammoth government spending plan, is also absorbing a higher volume, which means less exports. He said that "We must also consider that China's stimulus plan for the economy has required a lot of production for the domestic market. He added that "This is also keeping a lot of the production capacity for China."
