When the Federal Treasurer, Jim Chalmers, gave his rather glum forecast this week for the overall Australian economy in 2025, he could just as easily have been referring to the steel industry specifically. Indeed, the health of the steel industry is so inextricably tied to the state of the economy that Chalmers comments deserve further examination. In his mid-year budget update, the Treasurer predicted economic output will grow by 1.75% this financial year, a downgrade from the 2% forecast in the May budget. Wages are expected to grow by 3%, down from 3.25% but still higher than the unchanged inflation forecast of 2.75%. Household spending is forecast to grow by 1%, down from 2% at budget. Compounding Mr Chalmers´ budgetary problems will be a dive in tax receipts from Australia´s iron ore exporters whose main client, China, is still suffering from a drop off in demand for steel due to a weakening economy. Less steel production requires less iron ore. Fortunately, amid the gloom, Chalmers declared that government spending on steel-hungry infrastructure projects would continue. In fact, he announced new spending measures including an additional $1.2 billion for energy transmission infrastructure.

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Notwithstanding, we are about to enter a new year which is likely to be challenged by the same problems as the year we are leaving. It is in such times of uncertainty that bold operators often decide to take matters into their own hands: which is precisely what the Westview Group had decided to do. The privately-owned company has announced plans to build a $750 million steel mill in Pinkenba, near Brisbane Airport, to be operating by late 2027. Westview Group is owned by the Johnston family and operates one of Australia’s largest steel businesses, with annual revenues of $800 million. It sells steel bars and thick wire used to reinforce concrete slabs in the construction industry. Lendlease, John Holland and CPB Contractors are among its customers. Westview’s best-known business is Bestbar. It also operates the Alter Steel, Wire Industries and Unipod brands.

In an interview with the Australian Financial Review (AFR), Westview´s chief executive, Grant Johnston, admitted that uncertainty within the marketplace had contributed to the family´s decision. Unwilling to increasingly rely upon Chinese imports, Mr Johnson said he was also worried about the state of InfraBuild, which supplies about 70% of the steel that Westview distributes. InfraBuild is part of Sanjeev Gupta´s global steel business. “We’re very concerned about how this will pan out and Sanjeev’s situation,” Mr Johnston told the AFR. InfraBuild has been badly affected by the inability of Mr Gupta’s Whyalla steelworks to restart its blast furnace. In a challenging market, BlueScope Steel has also been forced to cut its revenue forecast for this year.

“Once the new mill is running, we will be the third-largest steel producer in Australia,” Mr Johnston told the AFR. The Pinkenba plant will produce up to 500,000 tonnes of low-carbon reinforcing steel annually. Westview is also in the final stages of construction of a $30 million steel fabrication site in Salisbury in Adelaide, to be operating next year.

To other news, the world is progressing towards green steel less rapidly than hoped because, whilst everyone thinks it´s a good idea, but no one wants to pay for it. News this week, however, that BHP, BlueScope Steel and Rio Tinto have joined forces to develop Australia’s largest ironmaking electric smelting furnace (ESF) pilot plant, at the Kwinana Industrial Area, south of Perth. The pilot plant aims to prove Pilbara iron ore can be used to produce lower-carbon emissions molten iron using direct reduced iron (DRI)-ESF technology. The plant would produce 30,000 to 40,000 tonnes of molten iron a year. The collaboration is called NeoSmelt and, if successful, could open a pathway to near-zero emissions steelmaking using Pilbara iron ore. Woodside Energy will join the consortium as an equal equity participant and energy supplier, subject to finalising commercial arrangements.

“These are the Pilbara ores that power this nation’s economy, so getting it right would be a major step forward in setting up Western Australia and Australia to be an important part of a low greenhouse gas emission future,” said BHP Western Australia Iron Ore Asset President, Tim Day, when the project was announced on December 17. Tania Archibald, BlueScope´s Chief Executive Australia, commented: “BlueScope’s role as Project Manager leverages our deep iron and steelmaking experience at the Port Kembla Steelworks and our unique capability as the operator of the world’s only electric smelting furnace processing DRI in New Zealand.” The plant will initially use natural gas to reduce iron ore to DRI but, once operational, the project aims to use lower-carbon emissions hydrogen to reduce iron ore. Subject to funding and feasibility studies, operations are expected to begin in 2028.

Necessity is the Mother of Circumvention. In May of this year, InfraBuild began yet another journey along a path it has frequently travelled. It approached Australia´s Anti-Dumping Commission (ADC), this time to conduct an anti-circumvention inquiry into rod in coil exported to Australia from the People´s Republic of China during the period January 2015 to March 2024. Since May, a lot of effort and money has been spent on debate going back and forth on the merits of the application. The original Statement of Essential Facts date has been pushed out to January 24 next year. The ADC hasn´t given any detailed reason for delaying its consideration, other than “because of the Commission’s changing business requirements”. The importer, Thyssenkrupp Material Trading (TMT), is one of several companies to make a submission to the inquiry. TMT´s lawyer, Daniel Moulis of Moulislegal, has called the delay in the Statement of Essential Facts unjustified and clearly obfuscation. Moulis told the inquiry: “Simply `parking´ an anti-circumvention inquiry for a long period of time is enough to slow down or stop trade activity in the products complained against. This starves important Australian industries (in this case, the construction, building and housing industries) of needed products and forces prices up, without there being any proven legal justification to do so.” He said his client felt InfraBuild´s application was ill-founded. It has been a tough year for InfraBuild, realising a $35.5 million loss in the three months to September 30. As Australia´s only manufacturer of long steel products, it´s not surprising InfraBuild would want to fend off competition from importers of the same products at lower prices. For which ambition, the ADC is a good place to go.