Australia's steel industry is in talks with the federal government to enact a rarely used safeguard instrument recently adopted in Europe to protect smaller players from the impacts of US tariffs.
Imports of fabricated steel into Australia surged 50% in the past two years up, until just before the US implemented 25% tariffs on Australian steel and aluminum in February, according to Mark Cain, CEO of the Australian Steel Institute. The ASI represents over 600 companies in the country's steel industry.
Australia is now looking to strengthen its antidumping regime in response to the new round of US import tariffs earlier this month, which both industry and government fear will result in trade diversions and potential dumping of imports at prices lower than the domestic price.
However, the ASI wants the government to consider more avenues under World Trade Organization rules that are "more responsive to small companies," as the antidumping commission is used more by bigger players.
"The ADC system is not readily suited for small- to medium-sized enterprises, which is what the fabricators are," Cain told Platts, part of S&P Global Commodity Insights.
"So we're in dialogue with the government about exploring the use of something called a safeguard measure, which is essentially a quota and tariff used to protect sovereign capability. The Europeans and the UK have done it with steel, but it's a seldom used trade instrument in Australia," he added.
While US President Donald Trump's tariffs affect all goods imported into the US, the ADC could recommend more discrete tariffs specific to certain products, "based on individual cases where dumping has been proven," Cain said.
"Small- to medium-sized enterprises can't fund a one- to two-year investigation, nor potentially survive that period waiting for an outcome ... [whereas] preliminary tariff determinations can be done when it's apparent there's injury being caused and they can place a tariff on without the full investigation," Cain said.
The ASI also wants better transparency of currently "opaque" import statistics, which the government could address by improving data visibility, the CEO said.
The ADC's current caseload is dominated by steel industry applications, and Cain has told politicians and the ADC that the surge in imported fabricated steel into Australia is "having a big effect not only on the fabricators in Australia, but it ripples back up the supply chain."
For example, demand for GFG Alliance's Whyalla Steelworks in South Australia in the past two years may have been impacted by about 100,000 mt annually "because [steel] is coming in fabricated rather than them selling the structural steel to fabricators to make here," Cain said.
Australian steelmaker BlueScope Steel was appointed as adviser to the administrators of the Whyalla Steelworks group, which is looking for a new owner. The federal and South Australian governments have also announced an A$2.4 billion ($1.5 billion) bailout package for the steelworks.
Cain has also been urging the federal government to explore the accessible market to help make the operation viable for the long term.
"What I've been saying to the government is, 'Listen, the stabilization and the rescue package for Whyalla Steelworks [to provide] stability and a renewal of the steelworks is great. However, if there's no market or further erosion of the market, it makes the business proposition more challenging'," Cain said.
GFG unit InfraBuild Trading, Australia's largest manufacturer of integrated steel long products, had to adapt its supply chain as it buys much of the output from the structural steel mill at Whyalla, which has been facing production challenges, according to Francisco Irazusta, InfraBuild's CEO and executive director.
Whyalla started casting steel again in January after a four-month shutdown due to "operational challenges and extensive repairs," according to GFG. Its blast furnace shut down again for 36 hours in March for repairs.
Werner Raspotnik, executive chairman of Sencova Steel Fabricators, said importing cheap but inferior-quality fabricated steel creates "a false economy because [we] and other fabricators spend a lot of time and money fixing it up."
A WorkSafe Victoria guidance note in January warned of the need to determine the reliability of imported steelwork that "may result in catastrophic structural collapse," as it may be fabricated to unknown standards, fabricated poorly due to poor quality assurance systems, or fabricated with improper substitution of materials and welding consumables.
Importing cheap fabricated products also means "there's [fewer] stuff being made here [and fewer] apprentices being put on ... In 10 years' time, there won't be any boilermakers," Raspotnik said.
April 2025