The process of gradual suspension of steel activity is estimated to last three months.
After analyzing the resolution of the Anti-Distortion Commission of the Chilean Congress on the application of anti-dumping duties to imports of Chinese steel bars and balls, the board of directors of the Compañía Siderúrgica Huachipato (CSH) has been forced to make the painful decision to suspend - for an indefinite period - the company's steel operations in the port of Talcahuano.
Through an official statement, Huachipato mentioned that he appreciated that the Anti-Distortion Commission has identified the existence of significant irregularities in steel imports from China, as well as the efforts of the authorities. However, the defined rates were lower than those requested by the company and, furthermore, differentiated by producer and exporter.
This is because all the producing companies are controlled by the Chinese State and, furthermore, they are large, so in practice all the steel that will be exported to Chile could be derived from the company to which apply the lowest surcharge, eliminating any possibility of competing on equal terms.
“We were clear about the level of distortion caused by Chinese steel and that the requested measures were the only way to level the playing field and make CSH's operation viable. We appreciate that the authority has recognized the existence of distortions and unfair competition, but unfortunately the commission established surcharges lower than those requested.
Even beyond the percentage of the tariff surcharge, the measures adopted are insufficient to reverse the impact of unfair competition. Therefore, after exhausting all existing remedies, without achieving effective measures to combat this problem, the company must suspend steel operations in Talcahuano,” said César Garrido, general manager of Siderúrgica Huachipato.
Last year, CSH had asked the Anti-Distortion Commission to initiate an investigation into unfair competition with steel from China at subsidized prices that place it below market costs. Although in December the commission accepted the request to study the issue, the provisional measures applied do not manage to reverse the impact of this price distortion, which causes the company to lose close to US$ 1 million per day, generating an unsustainable operation. in the time.
“Today we mourn the loss of an emblematic steel company for the Biobío region and Chile. Huachipato is the main producer of steel for mining in Latin America, particularly in the two main copper production markets, which are Chile and Peru. "It has been more than 70 years where thousands of people have put all their knowledge, talent and energy at the service of the country, along with generating shared value with their environment," said Julio Bertrand, president of Siderúrgica Huachipato.
The company has designed a process of gradual suspension of its steel operations, which will last at least three months. During this period, the company is committed to maintaining an open dialogue with its stakeholders. It should be noted that the company will continue to operate some non-steel businesses indefinitely, such as the development of port and logistics activities.
Likewise, CSH will continue studying the feasibility of developing projects for the future production of green steels from a pilot plant for the direct reduction of iron ore using green hydrogen. Given the suspension scenario, the company will fully comply with all its commitments to collaborators, clients and suppliers. In the case of workers, a package of measures will be incorporated that includes financial compensation, training in relevant skills, support for job reintegration and opportunities for additional education.
“I especially want to thank our workers, their representatives, and the regional authorities and industrial unions who have supported Siderúrgica Huachipato. We made a very painful decision today, but one that we will carry out with the conviction that we have done everything in our power to maintain a strategic industry for the region and the country,” Julio Bertrand added.
