Chile’s largest steel mill, Wachipato, is closing after 74 years in operation, leaving thousands of people unemployed.
Life in Talcahuano, a town of 160,000 people in the Biobio region 500 kilometres (310 miles) from the capital Santiago, revolved around the landmark steel mill.
The closure of the plant affects 2,700 direct jobs, including those held by subcontractors, and about 20,000 indirect jobs, and marks the end of non-recycled steel production in the country.
Wachipato produced 800,000 tonnes of steel a year and was a key supplier to the mining industry, the backbone of the Chilean economy.
The plant was founded in 1950, but it has failed to withstand competition from Chinese steel, which is sold to Chile at prices 40% lower than domestic steel.
The steel plant has tried to hold out by demanding additional tariffs on Chinese imports. Although the tariffs were imposed in April after the Chilean Anti-Unfair Practices Commission found “unfair competition,” they were not enough to ensure the survival of the plant, which has accumulated losses of 700 million euros ($775.8 million) since 2019.
“It’s a decision that hurts us deeply, but we are convinced that we have done everything we could,” plant manager Julio Bertran said when announcing the facility’s imminent closure in August.
Ten million tons of Chinese steel flooded Latin American markets last year, up 44% in 2023 compared to the previous year.
In 20 years, China’s share of the global steel market has increased from 15% to 54%, according to the Latin American steel association Alacero.