BUENOS AIRES -(Dow Jones)- China's subsidies for steel tube exports are "not going to be sustainable," and there will likely be a wave of domestic takeovers there, a senior executive at steel tube maker Tenaris (TS, TEN.MI) said Friday. China's manufacturers have "gone to the international markets with non-market principles," Vice President of Finance Guillermo Vogel said during a conference call to discuss third-quarter results. The country's exporters have the advantage of an undervalued currency, heavy subsidies and a 13% tax rebate on exports, he said. The number of unfair trade cases being brought against China is increasing, in countries such as the U.S., Europe, Canada, Mexico, Argentina and Russia, pushing Chinese companies "a little bit backwards," Vogel said. The executive said that in today's environment, he doesn't believe Chinese companies have competitive advantage in terms of costs. He also said there is likely to be consolidation. "China is a very fragmented [market] and we're going to see a restructuring and a consolidation there," Vogel said. The Chinese market, boosted by a mammoth government spending plan, is also absorbing a higher volume, which means less exports, said Alejandro Lammertyn, the firm's commercial director. "We must also consider that China's stimulus plan for the economy has required a lot of production for the domestic market," Lammertyn said. "This is also keeping a lot of the production capacity for China." -By Matthew Cowley, Dow Jones Newswires; +54 11 4103 6740; matthew.cowley@dowjones.com
