Good News for the Australian Steel Industry

The Australian steel industry has had its share of “hard times” over the last couple of years.  Australia’s steel makers are not alone. Steel manufacturers in North America, in Europe and elsewhere in Asia have suffered, as well.

A weak global economy has caused “financial pain and suffering” to just about everybody in the worldwide steel industry, including, of course, those companies that operate in Australia.

 Cutbacks in construction projects for office buildings, factories, private homes and more, all triggered by a weak demand, have been largely responsible for significant job loss and reduced corporate revenues.

But, things may be finally changing here “in the land down under.” Why …

The Australian government, mindful of the difficulties being encountered by one of the country’s core industries, has decided to step in and “step up to the plate” in an effort to help steel manufacturers “ride out the storm” and overcome it.

As such, it has issued a public statement in which it has promised to institute a Two Part Program to help Australian steel manufacturers transition to a new and brighter future.

The government, by its statement is actually acknowledging that it recognizes and understands the importance of the steel industry in Australia’s economic life. A healthy steel industry is essential to a vibrant national economy.

So … the newly-proposed program will offer the following benefits and assistance to steel manufacturers …

(1) The Steel Transformation Plan will include an accessible fund of $300 million for use over a 4-year period once the program takes effect. The money is slated for use in the following ways: to provide valuable transitional support for information, investment and production of new industry-wide initiatives.

(2)  A 10% Increase in Permit Allocations for Crude Steel will be offered in an “expanded assistance program” under the Jobs and Competitiveness Program. It is slated to become available in 2016/17.

Both programs are designed to help Australian steel manufacturers convert their industry into one that is efficient and sustainable – in the near future and for decades to come.

Will this Two Part Program work? Steel manufacturers in other countries, such as China, receive government assistance that helps them to compete globally.

There is every reason to believe that government assistance in Australia will help the country’s steel manufacturers to thrive and prosper – in the short-and-long-term.

And that is, of course, very good news.

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