Hosts Argentina pulled off a 24-21 win over Ireland in their final Pool match to put them into the 5th- 8th place group.
Wales Under 20 head coach Phil Davies was disappointed with the performance against New Zealand but says there is a still lot to play for in this tournament.
"We feel a bit deflated following the New Zealand game because the boys worked hard as they always do, but we just weren't very accurate under pressure, especially in the first half.
"There was a huge amount of effort to put some phases together and we scored a try when we kept the ball which was a positive point but ultimately we just weren't good enough. Everyone says how clinical New Zealand are and they took their points when they had the chance which is the long and short of it.
"We learned a lot in that game, especially that when the intensity and the pressure really cranks up, you have to keep your defensive system in tact and look after the ball. If you can do that, you will compete against most sides and we saw glimpses of that on Sunday but that's not good enough, you need a sustained effort over the full 80 minutes.
"Despite the loss, we've got a lot to aim for in this championship. We have a chance to emulate what we achieved last season, or better that if we finish fifth rather than sixth. And if we end the tournament with four wins out of five games, we can be relatively happy with the outcome."