Brazilian steelmaker Gerdau has halted a US$45 million investment in Peru as a pressure tactic. The company is demanding a halt to a project by the Chinese company Shenglong, alleging irregularities in its permits and the risk of unfair competition.

Gerdau, which controls a third of the Peruvian market, accuses China of subsidizing steel and selling it at artificially low prices. The conflict poses a regulatory challenge for the local government given China's strong economic presence in the region.

While Shenglong denies building the plant, authorities have detected unauthorized construction on the site. This confrontation highlights the battle being waged by Latin American steelmakers to curb the advance of Chinese steel in their markets.