Steel unions have called on the Federal Government to take action to boost the embattled industry amid predictions more Illawarra jobs will go over the next six months.
Australian Workers' Union national secretary Paul Howes will recommend a range of initiatives at the union's national conference on the Gold Coast on Monday.
At the forefront will be a call for the Government to use Australian product as it attempts to drag the nation out of the financial crisis via infrastructure spending.
"It's no use spending the money on infrastructure, things like roads and bridges, and use ... Chinese steel," Mr Howes said.
"By using Australian product the Government can ensure steel mills like Port Kembla keep ticking over."
Yesterday, ANZ head of commodities research Mark Pervan predicted more steel industry job losses, including in the Illawarra, over the next six months.
Already BlueScope Steel has been forced to reduce its reliance on contractors, which has resulted in about 50 redundancies locally.
"I think we haven't yet seen the full impact of the global economic slowdown," Mr Pervan told the Mercury, indicating steel markets were "generally about six months ahead of activity".
While he believes steel prices have bottomed out, the prospect companies will continue to reduce labour costs as a measure to cope with lower demand over coming months is a real one.
"It's hard to say how long things will last, but you might see mild recovery in the second half of the year."
The Australian Industry Group has also released a package of fiscal measures it believes will help protect the jobs market.
These include tax incentives for companies which invest in training and development and a call for $2 billion to be spent on local, state and national infrastructure.
"The Illawarra is likely to feel the real impact of the economic downturn ... as a number of major projects, such as the (BlueScope) blast furnace reline and tourist centre development at Bulli Tops, come to an end," Ai Group regional manager Leanne Grogan said.
Australian Workers' Union Port Kembla branch secretary Andy Gillespie says the "double whammy" challenge of the financial crisis and emissions trading scheme made this one of the most crucial periods in steel-making history.
He called on the Federal Government to adjust the tariff system so Australian steel could be more competitive.
"It's not a level playing field at the moment," he said.
"And what you have with the emissions trading scheme is a situation where Australian companies will lose business and it won't make one iota of a difference to the environment.
"With one tonne of steel produced here you're 50 per cent better off environmentally than if that steel was produced in some overseas area, because of the process and equipment here, which is what could happen."
Alluding to steel bounty payments and the Button Plan of the early 1980s, Mr Gillespie said a similar "re-envigoration of the steel industry is needed" to overcome the industry's challenges.
Mr Gillespie said he hoped BlueScope Steel - which closed pickle line and cold mill operations this month - would continue to invest in the region.
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