Struggling steelmaker Arrium to be boosted by new import duties imposed on cheap Chinese steel

Updated

Import duties will be imposed on "unfairly priced" Chinese steel products by the Federal Government in a bid to help embattled South Australian steelmaker Arrium remain competitive.

Key points: Import duties now apply to two types of steel products from China

Duties are up to 53 per cent of the export price, and are intended to help Arrium

Australian Workers Union says the move will not help Whyalla

Industry Minister Christopher Pyne said duties of between 37 per cent and 53 per cent of the export price would apply to "rod in coil", and between 11 per cent and 30 per cent on reinforcing bar.

The move is intended to drive down oversupply of Chinese steel, and is based on recommendations by the Anti-Dumping Commission.

Pressure has been mounting on the Government to tighten anti-dumping measures as a result of the plight of Arrium.

The company is in voluntary administration with debts of $4 billion, and workers at the company's Whyalla steelworks are facing an uncertain future.

"Obviously we have relatively high production costs and China has relatively low production costs, and they have been potentially unfairly pricing their steel in Australia because of extra support from their Government," Mr Pyne said.

"This obviously assists Arrium who are producers of these kinds of goods.

"The Australian Government is working to sustain the local steel industry, while acting within World Trade Organisation rules."

Mr Pyne said the duties would apply as of April 22.

The Government said the exact duty would depend on the exporter, and "there would be an additional duty should the export price fall below a specified floor price".

The Australian Workers Union (AWU) said the measures would help parts of Arrium's business but did not go far enough.

"It's certainly not the fix for Whyalla," national secretary Scott McDine said.

"We need to boost local steel procurement for Government infrastructure projects up to 90 per cent... and we need to see co-investment in steelworks like Whyalla so we can upgrade them."

South Australian acting branch secretary Peter Lamps said Whyalla was mainly in the business of producing steel products other than those targeted by the new measures.

"Whyalla mainly produces structural steel and rail products," he said.

"That is just as much under stress, as far as the dumping of overseas products is concerned, as reo rod and bar."

SA Government offers free legal advice to Whyalla contractors

The Federal Government said Australia currently has 44 anti-dumping measures in place that apply to 12 steel products from 14 countries.

The union said the new duties do not breach Australia's obligations under its free trade agreement with China.

South Australian Treasurer Tom Koutsantonis visited Whyalla on Friday to meet with contractors receiving free legal advice from the State Government.

Debts to Arrium's suppliers have been frozen and it is not clear when they will be paid.

"We're also offering accounting services and consultation with the administrator to make sure they all get access to the appropriate financial advice," Mr Koutsantonis said.

Mr Koutsantonis said a 10-month high in iron ore prices would do little to help Arrium in the short term.

Topics: steel, industry, federal-government, unions, tax, trade, whyalla-5600, sa

First posted