News

Huachipato Suspends Steel Operations Indefinitely

Sponsors

• The company announced the gradual halt of its production due to the inability to compete with Chinese steel and its critical financial situation.

The Huachipato Steel Company (CSH) communicated the indefinite suspension of its steel operations, a decision that repeats the shutdown from March of this year. The company stated that this measure is the result of "multiple factors," including the inability to pass on the recommended surcharges by the Anti-Distortions Commission to prices, the intensification of Chinese dumping, and a financial situation that has deteriorated over the years.

In a recent public hearing at the National Economic Prosecutor's Office (FNE), the possibility of establishing fixed tariff rates to counteract dumping in imports of grinding bars and balls was discussed. Molycop has requested stricter definitive measures than the provisional ones, while Huachipato has asked for more agile mechanisms to detect market distortions.

The company has lost over $700 million since 2019, with losses of $385.5 million in 2023 alone and a decline of $41.8 million in the first quarter of 2024.

The suspension of operations will be gradual, ending in September, and the company assures it will fulfill all commitments with employees, clients, and suppliers. An exit plan for workers will be implemented, including financial compensation, training, and support for job reintegration.

CAP's general manager, Nicolás Burr, has reiterated the Group's commitment to the Bío Bío region and announced that non-steel operations will continue, along with investments in innovative projects such as green steel and Rare Earth extraction.

Julio Bertrand, chairman of Huachipato's board, expressed that the decision is painful and thanked the support received. Despite efforts, financial continuity and the sustainability of steel operations have become unviable.

The Minister of Economy, Nicolás Grau, described the decision as "regrettable" and "devastating" for the Bío Bío region, criticizing the management of Huachipato and Molycop and emphasizing the social responsibility both companies should uphold in this context.

Meanwhile, Héctor Medina, president of Huachipato's Union No. 1, shared his view on a decision made by the company's holding, which was not taken by Huachipato's board or the workers. He stated that the joint effort of workers, management, and the board was to prevent the indefinite closure of the company.

However, he believes the current decision undermines all efforts made. Despite this, production will continue until September to fulfill an existing purchase order and deliver products to customers.