In the sporting world at the Paris Olympics, athletes are trying to achieve their `personal best´ and more. In the steel world, some previously high-performing products are now well below their personal best and may yet fall further. As our charts show, in the last two months alone, China rebar has dropped 13% to $443 m/t. Wire rod is off by 12% to $480 and the flat product HRC North America has fallen 12% from its June price of $825. Industry watchers say the falls can be partly attributed to China´s lagging property sector – normally a major consumer of steel – which remains in the doldrums. A 10% decline in investment in that sector since January suggests no recovery is likely in the near term. Meanwhile, the price of iron ore, a key element in the steelmaking process, has gone from $115 m/t in June to $102 now: an 11% fall. With less steel needed in China and inventories of iron ore piling up on Chinese ports, the red ore might be in for a spell under $100. Plunging stock markets around the world in recent days also carry an ominous message: that central banks have over-cooked the fight against inflation. In concert with the decline in steel prices and stock markets, there has been another significant fall in the

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number of new dwellings approved in Australia. The Australian Bureau of Statistics (ABS) has reported that housing approvals in June fell 6.5% on the previous month to just 13,237 nationally. “Private sector dwellings excluding houses fell by 19.7% in June, reaching the second lowest monthly level recorded since January 2012. The June figure represents a yearly fall of 22.1% compared to the same month last year. Conditions for apartments remain challenging owing to high construction costs and higher interest rates,” said Daniel Rossi, ABS head of construction statistics. “Over the past 12 months, there have been a total of 162,892 dwellings approved, compared to 177,936 in the 12 months prior, representing an 8.5% decrease. This is the lowest number of dwellings approved on a financial year basis since 2011/12,” Rossi added. 

Master Builders Australia (MBA), the peak body for the construction industry, has said the decline in housing approvals could see Australia fail to meet the federal government’s National Housing Accord, which set a target to build 1.2 million new homes across Australia by 2029. “If approvals continue at this level, Australia will fall 385,000 homes short of the 1.2 million target,” said MBA chief economist, Shane Garrett. The industry body also said there needs to be work outside the housing portfolio to address bloated building costs and construction times. “Addressing the housing crisis requires a holistic approach with input from multiple portfolios from industrial relations, infrastructure, procurement, immigration, to skills and training,” said MBA´s CEO, Denita Wawn.

Dr Michael Fotheringham from the Australian Housing and Urban Research Institute told the ABC part of the problem lies in the construction process. “If you look at other countries, the construction of housing is much more industrial in its scale. It’s much more about building homes in factories and then moving them to location. So that prefabricated or off-site construction is a key area where we’ve got more work to do.”

Going green – or not? During the past few years, the iron ore miner and energy company which now likes to be referred to simply as Fortescue, has announced a slew of green initiatives and cooperative endeavours. But in mid-July it revealed it would be cutting 700 jobs (4.5% of its global workforce) as part of a scaling back in its ambitions to turn into a green hydrogen giant. At the time, Andrew Forrest, Fortescue’s founder and executive chairman, told the Australian Financial Review that the wars in Ukraine and the Middle East had driven up global energy prices, making large-scale green hydrogen production unviable. “In that environment you’re not going to bring in major sources of green hydrogen, which relies on cheap energy prices,” Forrest told the newspaper. However, by the end of the month, Fortescue was saying it still plans to boost capital expenditure at its energy division to $500 million, up from the initial plan of $300 million. Company CEO, Dino Otranto, told a news briefing in China: “Pivoting to producing green iron metal is the next step for us, and we see a massive potential in green iron industry out of Australia, supplying China.”

One way or another, the green revolution is coming. Playing its role, the Australian Steel Association will hold a zoom meeting in just a few days on August 8. Titled “Unleashing Australia’s Potential In Green Steel Through Technologies”, the webinar with SMS group will explore strategies and innovations shaping the future of the green steel industry. The session will examine the transformative impact of decarbonisation, state-of-the-art steel production methods, and the integration of sustainable practices within the industry. Click here for further details. Meanwhile, don´t forget the special feature on “Sustainability” coming up in our website AustralianSteel.com in September.

Australia initially rode the sheep´s back to economic prosperity; then we got very rich thanks to mining. On the 19^th of July, Rio Tinto celebrated the shipment of the four billionth metric tonne of iron ore from the Pilbara in Western Australia to China. The shipment was loaded at Dampier Port and was bound for China Baowu Steel Group, the world’s top steel producer. The milestone comes 51 years after the first shipment of almost 22,000 tonnes of Pilbara iron ore was sent from Dampier Port to China’s Shanghai No.1 Steel Mill, which has since become part of China Baowu. Over more than half a century, China has grown to become Rio Tinto’s largest customer with about 250 million tonnes of iron ore shipped each year. Four billion tonnes is enough iron ore to produce the steel needed for about 45,000 Sydney Harbour Bridges – if you wanted that many.