CAP indefinitely suspends steel operations at CSH

Chile’s CAP group has decided to suspend operations indefinitely at its Huachipato Steel Company (CSH) rolling plant in the southern Biobío region due to what it claims is China's dumping of steel bars in the local market.

In April, the Chilean government imposed anti-dumping tariffs on two steel products from China, including steel bars, but the company deemed the measure insufficient, as the tariffs are set to expire in September. It reported US$700mn in accumulated losses since 2019 through the first quarter of this year.

The finance ministry published a decree in April imposing a provisional anti-dumping duty of 24.9% on steel bars to manufacture conventional grinding balls. But “the steel industry’s structure and the market’s response did not allow the duty to be transferred to the price, making continuity unsustainable,” CSH chairman Julio Bertrand said in a statement.

CSH will suspend coke production, the operation of blast furnaces, steelmaking and continuous casting, and rolling of long steel products gradually through September, CAP said in a statement filed with regulator CMF. 

“The impact will be very strong due to the loss of jobs for thousands of direct and indirect company employees, affecting various productive and technological chains linked to the plant, both at the regional and national level,” Álvaro Ananías, head of Biobío business chamber, told BNamericas. 

CSH will maintain its non-steel businesses such as the extraction and sales of limestone, port and logistics activities, among others.

Likewise, it will continue to advance in the implementation of a pilot plant to produce green steel manufactured from iron ore and will maintain the agreement with Aclara Resources, through a partnership with REE Alloys, to extract rare earth at the Penco Module project.

A hearing held at the national economic prosecutor's office this week to review the investigation into the Chinese dumping case, where representatives of CSH management and unions asked to maintain or increase the current tariff rates that expire next month, failed to reach an agreement, a union spokesperson told BNamericas.