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Monday, August 22, 2011

Australian Steel Exports to End

From now on Australia won’t be exporting any more steel, the high Aussie dollar, high iron ore and coking coal costs, low steel prices and more efficient Asian steel mills have virtually put us out of business. From now on, all steel produced in Australia will be for local use only, which includes the well-known Colorbond fencing and roofing.

BlueScope Steel will close its No 6 blast furnace at Port Kembla and the Western Port hot strip mill at Hastings east of Melbourne which will mean the loss of around 800 jobs in NSW and 200 in Victoria. Raw material prices have impacted heavily and BlueScope who have experienced a difficult year and a $1 billion loss. This puts an end to Australian steel exports and industry leaders are saying that we now have a major crisis in manufacturing.

The people of Wollongong, the home of BHP, have been suffering the decline of the manufacturing industry for years. Like Newcastle, the Illawarra has been dying a slow, painful death and its future looks grim. BlueScope exports about half of the five million tonnes of steel a year it produces at its two Port Kembla blast furnaces - No 5 and No 6. The other four furnaces were retired as newer models were built.

Australian companies have had to sack 7000 people since June, many of them in the manufacturing sector but Trade Minister Craig Emerson refused to say if the government was working on policies to support manufacturers.

When Union leaders start criticizing the Labor government, you know we’re in trouble. Dave Oliver from the Australian Manufacturing Workers Union said "We need government intervention to guarantee that we've got a viable manufacturing industry in this country". Union leader Paul Howes was critical of Treasury for allowing it to happen and said “I don’t accept that Australia can’t have a viable manufacturing industry, even with a high dollar.”

I wonder if John Howard should have seen this coming and somehow headed it off, it doesn't just suddenly happen out of the blue. It looks like both governments have fallen down badly on this one. The Germans, the Swiss and a few other clever countries haven't sat back and watched their manufacturing industry go down the drain, they were clever enough to develop things that people want and need. Looks like we haven't been that clever.