But the Parliamentary Secretary for the Illawarra Gareth Ward suggested the unions’ wage demands were partially to blame for the situation.

Announcing a $136.3 million profit, BlueScope CEO Paul O’Malley said the company needed to find $200 million in savings, which included the loss of about 500 jobs, otherwise it would need to mothball the Port Kembla steelworks entirely, leading to the loss of 5000 jobs.

South Coast Labour Council Secretary Arthur Rorris branded the announcement as ‘‘corporate blackmail’’.

‘‘They’re saying you either lose another 500 jobs, that’s another 500 families without work, or we will shut the works. He’s made that very clear,’’  Mr Rorris said.

‘‘You can’t save a steel industry by trying to compete with some producers that are not playing by the rules. It can’t be done.

‘‘There is nothing in today’s statement by O’Malley that tells us they are prepared to look at anything outside the square. And that is disappointing.’’

Mr Ward was pleased the company returned a profit, which indicated they were heading in the right direction, but said the unions had played a part in making steel production more expensive.

‘‘Unions have been part of the reason why steel manufacturing and construction have become less viable in this country, because their continued and unrelenting campaign to place enormous pressure on wage inflation has been in part responsible for businesses becoming less competitive,’’ Mr Ward said.

On Monday, BlueScope said it had asked the state government for assistance in terms of concessions on payroll tax and WorkCover. Mr Ward could not confirm the substance of talks the government has had with BlueScope.

‘‘I can say to you we’ve had a discussion with BlueScope about what assistance the government can provide and, as it’s pretty obvious what areas are affecting them, it’s pretty obvious where those discussions are centred,’’ he said.

Oppositiopn spokesman for the Illawarra Ryan Park said  the state government needed to explain what assistance it would give BlueScope.

“We want to know how the Premier is going to help ensure a sustainable steel industry is maintained here in the Illawarra,’’ Mr Park said.

‘‘There are hundreds if not thousands of jobs on the line here and the government needs to act.’’ 

At a federal level, Illawarra MPs Sharon Bird and Stephen Jones called on the Abbott government to take action.

‘‘We must have a plan to ensure we retain our steelmaking capacity and this will require government, business and unions working closely together,’’ Mr Jones said.

Ms Bird said the government needed to put in a support package similar to that introduced by Labor in 2011, and called on Employment Minister Eric Abetz to reinstate the Illawarra Local Employment Co-ordinator.

‘‘Local workers who are being retrenched need support to help them find other work or undertake training to find a new job,’’ she said.

Greens Senator Lee Rhiannon said the fact BlueScope had turned a profit ‘‘undermined’’ the company’s calls for cutbacks at Port Kembla.

“The company’s financial results released today show it has no case to threaten the jobs and livelihoods of its employees at Port Kembla,” Senator Rhiannon said.

Ian Waters, part of the community campaign to mandate the use of 100 per cent of Australian steel in taxpayer-funded infrastructure, said BlueScope’s move to cut jobs wasn’t surprising.

‘‘The company is under assault from imported steel products so ... they have to do this sort of thing in order to survive,’’ Mr Waters said.

With Mr O’Malley announcing a three-month window to find the $200 million in savings, Mr Waters said the fight wasn’t over.

‘‘The fight’s only just starting,’’ he said.

‘‘Round one’s about to start in the state government and any old day round two is about to start with the federal government,’’ Mr Waters said.