The Australian Steel Institute (ASI) is working with state and federal governments to support Australian steel fabricators and manufacturers who have been undercut by a surge in low-priced, imported fabricated steel. The action comes on the back of a 2024 survey by the ASI which revealed 86% of local fabricators and manufacturers have seen reduced profit margins because of imported fabricated steel priced from 15 – 50% lower than the local offer. The extent of the price undercutting is reflective of subsidies being offered by the country of origin and/or dumping of product brought on by a slowdown in the economy of the producing nation. The use of subsidies and the dumping of goods to gain market share is unfair and breaches international trade rules. Local Australian businesses are not able to viably compete with overseas exporters who either benefit from subsidies or who marginally price their surplus production to flood export markets. This issue is particularly impacting east coast fabrication businesses which are reliant on the portal frame market for structural steel. The impacted businesses are reporting loss of viability due to decreased profit margin, loss of revenue due to lower volumes and capacity utilisation, and increased costs. Nearly half of those surveyed are undertaking some form of restructuring in an attempt to remain viable.

The brunt of the problem is being born by small- and medium-sized businesses, each typically employing 20 – 200 Australians, and providing skilled employment in their local region. Approximately 80% of those surveyed reported they are now operating at less than 80% capacity utilisation, which is typically a benchmark for breakeven profitability in manufacturing. At the extremely distressed end of the response, one fifth of businesses said they are operating at below 50% of production capacity. The survey validates reports provided to the ASI by individual member businesses over the past 12 months. Members have described a grim picture of needing to lay off long-term, skilled staff members to remain viable due to greatly diminished orders. The general manager of a long-established NSW steel fabrication business who contacted the ASI as part of the survey said: “We estimate that over the past 18 months there has been almost $300 million worth of steel imported from overseas into Sydney alone. This is money going offshore and directly affecting the Australian market and local jobs”. The ASI continues to engage with state and federal governments to bring this problem to their attention, to explain the damage being done to strategically important local industries, and to identify what courses of action are available to provide relief to members.

* This market commentary was authored by Mark Cain, the chief executive officer of the Australian Steel Institute. The ASI is the peak industry body for the Australian steel industry, representing 500 companies and 5000 members. Website: https://www.steel.org.au