Since Covid-19 suddenly appeared almost four years ago, the Australian steel industry has not been the master of its own destiny. First, the pandemic shut everything down; then the supply chain problems blocked everything up. The war in Ukraine, the energy crisis, soaring inflation and rising interest rates have all kept our steel industry executives captive to global events. And the Hamas-Israel conflict is now complicating matters even further. In such times, it´s best to look at the facts as they are, rather than trying to predict future developments. On which point, world prices had been on a gentle downward trend in recent months; however, as our graphs in this issue of ASN show, mid-October may have been a turning point. Comparing October 16 with November 15, we see Turkey rebar is up from $560 m/t to $590. In the same period, China rebar rose from $516 to $559, being 8.3%. Turkey steel scrap is up more than 10% from $368 to $408 in one month. The biggest mover is HRC North America which has risen by 30% from $792 in mid-October to $1036 now. Closer to home, the price of iron ore has risen by 10% in this same short period, from $117 m/t to $129. Much has been said about the Australian economy´s

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over-reliance on iron ore as its principal wealth-generating export. (Though you would be hard pressed to find a single country anywhere which doesn´t envy our good fortune at simply having to dig up the mineral and sell it: even if its end use does stir up some environmental damage criticism). The fact is iron ore is a great money spinner which may be about to get even greater. India has an ambitious steel-making future mapped out for itself and there is talk it may one day even replace China as our biggest customer for the red dirt. Furthermore, if reports are to be believed, India is currently in talks with Australian government officials to secure supplies of that other steelmaking ingredient: coking coal. Australia already accounts for more than half of India´s coking coal imports of around 70 Mm/t per year: and India wants a guarantee that we´re going to keep sending it.

There has been a deal of chatter in the Australian press over the past week after InfraBuild announced it had successfully priced an aggregate principal amount of US$350 million of senior secured notes due in 2028. In a statement, the company said the bonds were priced with an annual coupon of 14.500% and an original issue discount of 2.000%. InfraBuild said it intends to use the net proceeds from the notes in two ways. First, to redeem its existing US$325 million 12.000% senior secured notes due in 2024. Second, to pay fees and expenses associated with the foregoing transactions. The news came after InfraBuild had (earlier in November) announced its financial and operational results for the financial year ending 30 June 2023. The company said it´s on a solid footing after reporting AUD $5.69 billion in net revenue, albeit down by 5% on the previous year. However, the Australian Financial Review (AFR) says details contained in a 533-page document to prospective bondholders for the above-mentioned raising by InfraBuild offer additional insight. First, according to the AFR, in the document InfraBuild reports that its 5% revenue drop in the year to 30 June 2023 resulted in a 16% drop in net profit after tax to $239.6 million. Also, that the company expects adjusted EBITDA for the three months ended September 30 of this year to decrease to a range between $136 million and $146 million, and profit after tax to decrease to between $25 million and $35 million. This compares with adjusted EBITDA of $208 million and profit after tax of $87 million for the three months ended September 2022. The company said its expectations had been triggered by a slowdown in demand and a drop in margins which is affecting all steel companies in the region.