Australia is rich in iron ore and has developed a significant steel industry that smelts, refines, and shapes iron all the way from raw ore to finished products like ingots, billets, slabs, sheets, bars, and rods. Hot and cold rolling is common, and carbon and stainless steel are produced through alloying with carbon and chromium.
The Current State of Australian Steel
In recent years, massive exportation of Australian ore to China and competition with Chinese-made steel has been a major challenge to Australian steel. Steel industry revenues have been declining over about the last five years by over seven percent annually, and the first half of 2015 has seen continued, if somewhat less severe, decline.
Demand for Australian iron and steel has been falling in foreign markets and prices have been declining domestically as well. There is, however, a struggle for the life of Australian steel, and a glimmer of hope for the future.
First, Chinese steel production is expected to contract significantly in 2015 and 2016. This lull could give Australia an opportunity to better compete.
Second, there is a struggle to prevent further closures of blast furnaces in the Port Kembla steel plant in New South Wales. Over 400 workers recently gathered to protest against rumors that Bluescope was planning such a cut-back. There are still thousands of Australian steel workers, and there may be sufficient pressure to prevent further curtailments.
Prospects for Australian Steel
The 2015 Australian Steel Convention, where the future of Australian steel will be thoroughly discussed, is set to be held in Sydney this September 15th through 17th. The situation is somewhat bleak, but far from hopeless.
If steel corporations can streamline management, reduce waste, implement production of the new “super steels,” and improve worker training programs, a turn-around is certainly possible.
Despite the falling demand for steel worldwide, in recent years, Australian steel production was on the rise. Australia’s GDP has also been on the rise, and is expected to grow by over 2.7 percent through 2020. Australian steel companies have well established markets, high-quality products, and a technological edge over many competitors.
Despite these positive factors, many project a continued decline all the way to 2020, but there is lingering hope that the 2015 Australian Steel Convention will find effective ways to renew the industry to its former strength.