The global challenge for 2026 is this: If anyone encounters a free market economy, immediately report it to the authorities, because it´s an endangered species in need of protection. In Australia, we spent much of 2025 (quite rightly) bemoaning the fact that our steel industry battles against the importation of products whose low prices are the result of government subsidies in their country of origin. We criticised China for offering tax breaks and low-interest loans to its steel manufacturers as incentives to sell their products abroad. We demonised such behaviour by using the pejorative term “communist” whenever referencing the Chinese government. Meanwhile, in the world´s largest “free” market, what are Trump´s tariffs if they aren´t a subsidy? His tariffs serve two purposes: they are a price barrier to importers; and are effectively a tax break to the local manufacturers. The very antithesis of a free market. In Europe, which is often referred to by critics as a welfare state, tariffs and subsidies abound – indeed, they are encouraged. The latest, the carbon border adjustment mechanism, charades as a device against pollution, but amounts to a subsidy to local manufacturers because it pushes up the price of imported products.

In response to all this ghastly behaviour by foreigners during 2025, the Australian steel and metals industry went down precisely the same path it had so correctly criticised – and sought government assistance. Some of the larger amounts promised or dished out were: $2.4 billion to save the Whyalla Steelworks; $600 million for Glencore´s Mt Isa copper smelter and its Townsville refinery; $135 million for Nyrstar´s Port Pirie and Hobart operations; then, just before Christmas, an as-yet-unknown amount (but whatever it takes) to save Tomago Aluminium in NSW. So, China, USA, Europe….and Australia, all guilty as charged. Not to mention the countless other countries around the world who flagrantly support their own domestic industries.

No-one denies that subsidisation is a complex issue involving politics and real peoples´ lives. During 2025, the requests for industry handouts in Australia were typically made under the threat of major job losses, mostly in regional areas, where the exit of a large employer would be devastating to the nearby towns. Furthermore, it was argued that closures in the steel and metals industry would only serve to exacerbate the decline in manufacturing in Australia, which then increases our dependence on foreign suppliers.

Alison Reeve is the head of the Grattan Institute’s energy and climate change program. She told the ABC last year that there was certainly a case to be made for protecting our industrial base, as the country navigates the transition from fossil fuels to renewable energy. However, she said there was often no evidence of any overarching strategy behind the series of industrial interventions during 2025. “We seem to be at risk of bailing out people as they turn up,” Reeve said. If any Australian government – state or federal – steps in with financial assistance for an under-siege business, Reeve believes the government should explain the pathway to a sustainable future that such assistance gives that business. The taxpayer would certainly have a right to know.

When the Swiss mining giant, Glencore, was promised the $600 million bailout of its Mt Isa and Townsville operations, it declared the money would keep its loss-making smelter open for another three years. Okay…then what? At the time, the Minister for Industry, Tim Ayers, said the handout was “not a blank cheque”. Really? In fact, as history shows, the owners of the smelter threatened to close it in 2011, in 2016 and again in 2020. Each time the Queensland taxpayer came to the rescue: to the tune of $85 million in 2012, $15 million in 2016, and a multi-million dollar undisclosed amount in 2020. “Mount Isa has been bailed out roughly every five years for the past 20 years,” said Reeve. “That’s the trap you don’t want to fall into”.

The obvious question regarding subsidies is: If all the other countries are doing it, what option do we have but to do it as well? Quite so. However, that´s a matter for the politicians, who will have to decide which industries receive support and which don´t?

BlueScope Steel´s financial results for the first half of the 2026 financial year have delivered a very pleasant welcome gift to the company´s incoming managing director and CEO, Tania Archibald. The results, issued on February 16, showed the six-month period attracted a net profit after tax of $391 million. This was a 118% increase on the first half of FY2025. In a statement to the Australian Stock Exchange, Ms Archibald said: “Underlying EBIT (earnings before interest and taxes) for the half was $558 million, on stronger US spreads, higher volumes across key markets and solid cost performance”. BlueScope announced it is now targeting shareholder returns of $3.00 per share in the 2026 calendar year.

“In the half, all major projects progressed towards completion, including the EAF at New Zealand Steel, the new metal coating line in Western Sydney, the No.6 blast furnace reline and plate mill upgrade at Port Kembla, and the North Star debottlenecking project, all of which underpin BlueScope’s operational resilience and growth,” Ms Archibald said.

However, on a country-by-country basis, the results were mixed. BlueScope´s Australian operations delivered underlying EBIT of $122 million, which was 7% lower than 2H FY2025. North America delivered underlying EBIT of $447 million, a 35% increase on 2H FY2025. The Asia operations attracted an underlying EBIT of $97 million, 39% higher than 2H FY2025. Meanwhile, New Zealand and the Pacific Islands delivered an underlying loss before interest and taxes of $18 million. This was, however, an 11% improvement on 2H FY2025. With regards to the second half of the 2026 financial year, BlueScope says it expects underlying EBIT to be in the range of $620 – $700 million.

Finally, as the publisher of Australian Steel News (ASN), I have a significant announcement to make. After eight and a half years of publishing this newsletter, I have decided to call it a day. Therefore, this will be the last ASN produced by my company, Caletablanca Media. Likewise, the website, AustralianSteel.com (ASW) will become idle at the end of February. To the advertisers who have supported both platforms over the years, I offer a heart-felt thank you. To the readers, I trust you have enjoyed the content and that it has helped your decision making.

There is good news, however. After a pause of a month or so, ASN will resume arriving into your inbox, under the guidance of a new publisher. ASW will also be re-activated. I hope they serve you well for many years to come.

Sincerely

Mark Maccallum