Chile only steel mill shut by Chinese competition

Chile’s only steel mill, the Huachipato plant run by CAP, announced it will cease operations by September. The company claims that the large amount of Chinese steel entering the market has hindered competition, even after Santiago approved new tariffs to protect the local industry.

The company released the information that the decision was taken after “multiple factors that cannot be reversed in the short or medium term, among which are the impossibility of passing on prices of the surcharges recommended by the Anti-Distortion Commission, the increase in Chinese dumping and the complex financial situation that the company has been facing for years.”

US$500 million in debt

The company also stated that, in recent years, the increase in steel imports from China has caused up to US$500 million in debt. CAP plans to phase the plant’s closure so that, by September, all activities at the site will have ceased. The company generates, directly and indirectly, 20 thousand jobs in the Bio Bio region, which is located in central Chile.

In the statement, CAP acknowledged the actions of the Anti-Distortion Commission to try to contain the impact of cheap Chinese steel on the sector but stated that “almost four months after the measure was implemented, the behavior of the market has made it impossible to correct the imbalances” in the sector.

Chile’s leading trading partner

“This is a very devastating decision for the Bio Bio region, and the country knows that we, as a government, have made a great effort to reverse it,” said Economy Minister Nicolás Grau on Wednesday (7) in a post on X (Twitter).

China is Chile’s leading trading partner, responsible for almost 40% of its exports — one of the largest shares among Latin American countries.

Source:Valor Econômico

Original news report available at: https://valor.globo.com/mundo/noticia/2024/08/07/unica-siderurgica-do-chile-fechara-devido-as-importacoes-da-china.ghtml

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