Guest Author – David Roberts, Trading Director at Sanwa
Recognise The True Local Heroes
In 1999, just before Arium shut down its Newcastle blast furnace, Australia produced approximately 8 million metric tonnes of steel per year and had a population of just under 19 million people. Now, almost 25 years later, we have 27 million people but produce only 5.3 million metric tonnes of steel a year. Given that the Newcastle works produced steel mainly for construction, Australia’s capacity to build houses, apartments and infrastructure is therefore 30% less than before, whilst the population requiring those construction activities is 40% larger. So where does the extra steel come from? Now, let´s work this out: if it´s not coming from within the box, then it must be coming from…outside the box.
That´s right, imports. Now, as an importer over the past 30-odd years, I have weathered the ignominy of apparently not supporting local steel production. I have also been accused of being a dumper of imported steel, thus depriving local steel producers of sales.
(Correction: the single local steel producer of flat product or the single local producer of long product). Forget the fact these very same steelmakers have been complaining to the government over the last 30 years, claiming they need hand-outs to stay viable; and that we importers need to be eradicated via heavy, anti-dumping duties. In reality, it is the steel importers who have been saving the nation by providing steel to be used to house, employ, entertain and transport millions of Australians and new Australians in increasing numbers every year. The local producers dropped their bundle ages ago.
Mind you, just because a local steel producer has targeted Singapore, China, Indonesia, Malaysia, Thailand, Taiwan, Korea, Greece, Spain and Turkey with anti-dumping actions over the past 10 or more years for steel reinforcing bar (being the most common form of steel used in construction), this doesn´t mean it has surpassed all others in the quest for a perfectly protected market. No, that badge of honour goes to Canada. Bless their little maple leaf shaped hearts: the Canadians make InfraBuild look like the kid producing a flick knife in Crocodile Dundee. In Canada, the local producers (3-5 of them) have taken action against no less than 18 different countries!
I would have thought it hard to approach a government body with a straight face after having taken action against 10 countries for daring to sell into your market: especially when it´s pretty clear that all you are doing is trying to penalise legitimate exporters trying to enter a domestic market (Australia) which is a monopoly. The unfortunate truth is that the WTO has rules which effectively allow domestic manufacturers to confuse public sympathies and achieve results which run counter to their own country’s best interests. If a country wants to put a duty on “all” imports of a particular product, then shouldn’t they be open about it and see whether their constituency agrees with the protection the domestic producers is seeking – as opposed to going through the back door?
In Australia, steel importers are the local heroes who provide the construction market with much-needed steel which isn´t being produced locally in the volumes needed. You may have trouble identifying some of these steel importers, probably because the very largest of them are the local manufacturers themselves(!), taking steps to ensure they can supply their customer base with product when they are incapable of producing enough to satisfy the total market.
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Disclaimer. The Industry Insider column is an opinion piece where the views expressed belong solely and entirely to the indicated author, in this case: David Roberts, the Trading Director at Sanwa. Australian Steel News accepts no responsibility whatsoever for the veracity of the author´s opinions nor for the accuracy of any information given by him.
If you would like to contact David Roberts, you can do so via his email: [email protected]