Chilean steelmaker's union calls for greater efforts to protect domestic industry

The workers union at Chilean steelmaker Compañía Siderúrgica Huachipato (CSH) called on the senate's economy committee to hold talks between employees, the private sector and the government to do more to protect the domestic steel industry.

In April, a fair trade committee ordered provisional anti-dumping tariffs on steel bars and balls imported from China. The 24.9% duty on bars and 33.5% on grinding balls until September were welcomed by the company, but are still not sufficient to ensure the continuation of operations of the CSH bar rolling mill in Biobío region, which the company previously said it would have to shut down.

“Talks with the company, with mining companies and with other companies in the productive chain [are needed] to encourage development of steel which is considered a strategic industry for the entire country, to advance with green steel, generating the mechanisms for the mining industry to consume Chilean steel,” workers union No. 1 stated in a letter sent to congress on Friday.

The document can be downloaded, in Spanish, at the top right of the screen.

The union also called for the fair trade committee to have the power to continuously monitor the market and make early identification of any practices that could affect the steel market and have social costs, and take both preventive and provisional long-term anti-dumping measures.

At the end of April, Julio Bertrand, chairman of the CSH board, said in a statement that he hopes that the provisional tariffs “will be confirmed with definitive measures to compete on a level playing field.”

Last year CSH reported a negative gross margin of US$133mn, compared with a negative US$83.1mn in 2022. Ebitda was also in the red at US$156mn in 2023, increasing from the negative US$91mn seen in 2022, and its net loss was US$386mn last year, more than three times higher than the US$122mn loss the previous year. Meanwhile, CSH's total revenue in 2023 was US$583mn, down 14.5%. 

The poor figures were mainly due to average steel sales falling 21.4% for the year, according to the steelmaker's annual financial report.

The downward trend in international steel prices has been heavily influenced by increased exports from China, in turn caused by lower domestic consumption and excess installed capacity in the Asian nation.

“With the availability of imported steel at low prices, there was downward pressure on regional prices that began in mid-2022 when China's export prices began to fall,” Thais Terzian, principal steel analyst for consultancy CRU Group Chile, told BNamericas.

The drop in world and regional prices has also distorted prices in the domestic market "since steel is sold at price levels below production and freight costs," CSH owner CAP stated in a report.

“We have seen an increase in trade barriers, such as anti-dumping, import taxes and others, to contain trade practices that are considered unfair,” Terzian underscored.

Mexico and Brazil have implemented import duties on some Chinese steel products, followed by Chile's temporary anti-dumping tariffs.