Australia’s peak steel body, the Australian Steel Institute (ASI), is asking for government support for local steel fabricators and manufacturers, after research revealed the local industry is being seriously undercut by imports.
An ASI survey of steel fabricators and manufacturers in July 2024 revealed 86 per cent had reduced profit margins because of cheap imported fabricated steel, which is being priced between 15 and 50 per cent lower than the local offer.
ASI chief executive, Mark Cain, said the impacted businesses are reporting loss of viability due to decreased profit margin, loss of revenue due to lower volumes and capacity utilisation, and increased costs.
“The ASI is engaging with state and federal governments in order to bring this problem to their attention, explain the damage that is being done to strategically important local industries, and to identify what courses of action are available to provide relief to members,” said Cain.
The extent of the price undercutting being reported is indicative of subsidies from the country of origin, and/or dumping being a major contributor to the problem.
The use of subsidies and dumping of goods to gain market share is unfair and breaches international trade rules.
This is because local businesses are not able to compete with overseas exporters that benefit from a range of subsidies or marginally price their surplus production to flood export markets.
This issue is particularly impacting east coast fabrication businesses that are reliant on the portal frame market for structural steel, but it is also having a detrimental effect on a wide range of other steel product manufacturers.
The brunt of the impact is being born by small and medium sized businesses, each typically employing between 20 and 200 Australians, and providing skilled employment in their local region.
Approximately 80 per cent of those surveyed reported that they are now operating at less than 80 per cent capacity utilisation, which is typically a benchmark for break even profitability in manufacturing.