Australia's Steel Industry Battles Import Surge Amid Profitability Crisis
Australia's domestic steel fabrication industry is facing significant challenges due to a surge in cheaper imported steel, leading to reduced profitability and business closures. Cullen Steel, a company with over a century of operation, has reported a 90% drop in production and annual losses exceeding $20 million.
Despite implementing cost-saving measures like robotic welding, Australian companies are struggling to compete with overseas suppliers.
Overseas suppliers' quotes are up to 50% lower.
This situation has led to approximately 15 fabricators in New South Wales ceasing operations, with many others facing similar difficulties.
Drivers of the Import Surge
The increase in imports is partly attributed to a record 120 million tonnes of steel exported by China last year, driven by a slowdown in its domestic construction sector. With steel tariffs imposed by the United States, more Chinese steel is being directed to Australia. Additionally, Vietnam significantly increased its steel exports to Australia by almost 50% in 2025.
Industry Concerns and Sovereign Risk
The Australian Steel Institute (ASI) has voiced concerns regarding the potential loss of sovereign capability and national security if Australia becomes overly reliant on foreign steel fabricators.
The Australian Steel Institute (ASI) has voiced concerns regarding the potential loss of sovereign capability and national security if Australia becomes overly reliant on foreign steel fabricators.
Government Inquiry Launched
In response to these industry pressures, Treasurer Jim Chalmers initiated an urgent Productivity Commission inquiry in January to investigate the impact of structural steel imports on the domestic market. The inquiry, operating under the World Trade Organization (WTO) framework, will explore potential solutions such as tariffs or domestic quotas. An interim report is expected in September, with the final report due in November. The introduction of tariffs could potentially affect trade relations with China, Australia's primary trading partner.
Industry representatives emphasize the importance of preserving Australia's capacity for steel fabrication to maintain economic independence and national security.