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BlueScope Steel To Lay Off Workers, Mulls Plant Shutdowns
08/24/2015 - Against the backdrop of plummeting steel prices, Australia's BlueScope Steel Ltd. has undertaken a review of its Australian and New Zealand plants and may wind up shuttering them, according to The Wall Street Journal.
“We have to address the major challenge of losses in commodity steelmaking in Australia and New Zealand,” BlueScope chairman Graham Kraehe said, The Journal reported.
Like other steelmakers, BlueScope is trying to contend with an onslaught of Chinese steel exports, which are being driven by the economic slowdown in that country.
“There had been extensive changes recently in the global steel industry,” BlueScope Chief Executive Paul O’Malley said in a statement. “China’s finished steel exports have doubled to a run-rate this year of over 100 million [metric] tons per annum — an increase equivalent to the output of 20 Port Kembla steel works.”
Port Kembla is BlueScope’s flagship mill. It also has a steel works in New Zealand and operations in the U.S. and Thailand, The Journal reported.
“At these prices, it would be more competitive to externally source steel substrate than to continue to operate our Australian and New Zealand steelmaking operations,” said O’Malley. “Unless we deliver a game-changing approach to costs to improve their competitiveness.”
BlueScope said it will look to cut nearly US$180 million in annual costs from the Australia and New Zealand operations by mid-2017. Some of that will come through a workforce reduction of 500 jobs, according to The Guardian newspaper.
“(Port Kembla) is on a knife edge,” chief executive Paul O’Malley said, The Guardian reported.
Like other steelmakers, BlueScope is trying to contend with an onslaught of Chinese steel exports, which are being driven by the economic slowdown in that country.
“There had been extensive changes recently in the global steel industry,” BlueScope Chief Executive Paul O’Malley said in a statement. “China’s finished steel exports have doubled to a run-rate this year of over 100 million [metric] tons per annum — an increase equivalent to the output of 20 Port Kembla steel works.”
Port Kembla is BlueScope’s flagship mill. It also has a steel works in New Zealand and operations in the U.S. and Thailand, The Journal reported.
“At these prices, it would be more competitive to externally source steel substrate than to continue to operate our Australian and New Zealand steelmaking operations,” said O’Malley. “Unless we deliver a game-changing approach to costs to improve their competitiveness.”
BlueScope said it will look to cut nearly US$180 million in annual costs from the Australia and New Zealand operations by mid-2017. Some of that will come through a workforce reduction of 500 jobs, according to The Guardian newspaper.
“(Port Kembla) is on a knife edge,” chief executive Paul O’Malley said, The Guardian reported.
