BlueScope Steel has delivered a net profit after tax of $805.7 million for the 2024 fiscal year. The figure is a $203.5 million or 20% decrease on 2023´s full year result. BlueScope´s Australian operations generated an underlying EBIT of $376.9 million, 30% lower than FY2023. In a statement to the Australian Stock Exchange, BlueScope said domestic despatches were softer in the year, predominantly driven by lower building and construction activity, as housing approvals contracted and the backlog from the prior period was worked through. Managing Director and CEO, Mark Vassella, said, “Underlying EBIT for the year was $1.34 billion, representing a solid performance in the context of macroeconomic and industry volatility. Whilst this reflects a lower result than FY2023, it again demonstrates BlueScope’s resilience, as strength in the US steelmaking and global downstream operations offset the impacts of bottom-of-cycle Asian steel spreads on our Australian and New Zealand steelmaking businesses.” The steelmaker´s New Zealand and Pacific Islands division produced an underlying EBIT of $43.7 million, 66% lower than FY2023. The statement said margins had been impacted by lower selling prices, along with higher

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conversion costs, driven by higher energy costs, lower production volumes and both planned and unplanned maintenance shuts. BlueScope´s North American business delivered underlying EBIT of $935.1 million, 3% lower than FY2023. Mr Vassella further said: “Operating cash flow for the year, after capital expenditure, was $434 million.” Despite operating cash flow being lower than FY2023, BlueScope again finished the year with a healthy balance sheet showing $364 million net cash. The company´s Board has declared its intention to pay a 60 cents per share dividend for the year; and has also approved an extension of the share buy-back program to allow the remaining amount of up to $270 million to be bought over the next 12 months.

BlueScope continued to make progress on its sustainability outcomes during the year, achieving a 12.2% reduction in aggregated steelmaking emissions intensity against its FY2018 baseline, in line with its 2030 target level. During the fiscal year the company increased its overall percentage of women in the workforce to 25%.

Looking ahead to FY2025, BlueScope expects its Australian performance to continue to be impacted by low Asian steel spreads, driven by high regional steel production and exports, which affect both steel prices and raw material costs. Steel demand in the US is predicted to remain stable. If the market behaves in this manner, BlueScope said it expects the first half of FY2025 to produce an underlying EBIT in the range of $350 – $420 million. The lower level of $350 million would represent a 51% decline on last year´s equivalent period, whilst the $450 million figure would be a 41% decline.

Elsewhere, the nervous atmosphere at the Whyalla steelworks following the loss of 48 jobs has been exacerbated by uncertainty during August over whether the blast furnace might need to be temporarily shut down – again. The sequence of events is that ABC News reported obtaining an internal email dated August 15 which revealed the steelworks was expecting to run out of coking coal on August 26, with the next shipment due to arrive in early September. “When the coke runs out, we will shut the furnace down until the next coke shipment is onsite and partially discharged,” the email said. “This means a shutdown of around 12 days,” it continued. It was only in July that the blast furnace resumed operations after being out of action for more than three months following a mishap during routine maintenance. In that period, hundreds of workers were forced to take a pay cut of up to 30%.

Following the ABC´s report, a spokesperson for Whyalla´s owner, GFG Alliance, said the company had since secured coking coal from a competitor. “LPMA (Liberty Primary Metals Australia) has sourced a parcel of coke from BlueScope Steel after an unexpected delay of its regular overseas shipment of about a fortnight,” the spokesperson said. “This interim measure enables steelmaking to continue with minimal disruption, with a short hot idle for a few days,” the spokesperson added.

In late August, when BHP published its financial results for the year ended June 30, 2024, most observers were curious to see how the “Big Australian” would interpret the fall in the price of iron ore – a key component in steelmaking and one of BHP´s best profit drivers. The answer is: the company´s estimate of real-time cost support continues to sit in the range of US $80 – $100 per metric tonne on a 62% Fe CFR basis. In the medium term, BHP says China’s demand for iron ore is expected to be lower than it is today as the ratio of scrap-based steelmaking rises.

This evaluation came as BHP reported revenue of US $55.7 billion for FY2024, up 3% on FY2023. The increase was primarily the result of higher realised prices across iron ore and copper, where sales volumes also increased 3% and 5% respectively. However, attributable profit was down 39% from FY2023 to US $7.9 billion. In part this decline was due to an exceptional loss of US $5.8 billion (post tax), predominantly comprised of a US $2.7 billion impairment of Western Australia Nickel; and a US $3.8 billion charge related to the Samarco dam failure.

Mike Henry, BHP´s Chief Executive Officer, said: “We delivered record volumes at Western Australia Iron Ore, where we extended our lead as the world’s lowest cost iron ore producer. Across our global copper assets, we grew overall copper volumes by 9% for the second consecutive year and expect to deliver a further 4% in FY2025.”

Interestingly, BHP listed its total payments to governments as US $11.2 billion for FY2024. The company said its global adjusted effective tax rate was 32.5% and increases to 41.7% once revenue and production-based royalties are included.