Job losses at Port Kembla could have been on the cards if the exemption from the US steel tariff didn’t happen.
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After a few weeks of lobbying, US President Donald Trump has agreed to let Australia import steel into the United States without being slugged with a 25 per cent tariff.
While BlueScope does export some steel for sale directly into the US market, it also sends over around 300,000 tonnes a year straight to its wholly-owned Steelscape businesses in California and Washington state where it is turned into Colorbond
Those 300,000 tonnes of rolled coil come from the hot strip mill at Port Kembla.
A tariff had the potential to lead a drop in production – and a corresponding fall in jobs.
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BlueScope CEO Mark Vassella said, without the exemption, the company would have had to work out what to do with those extra 300,000 tonnes.
“It could have been winding down production, it could have been finding other markets for it,” Mr Vassella said.
“It would have resulted in lower margins from our perspective, so getting the tariff exemption is a very important step.”
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The company does have a steel mill in the US state of Ohio that is capable of making rolled coil that could be used by Steelscape.
But it’s actually cheaper to send Port Kembla steel to its west coast operations.
“It’s an unusual market in the US,” Mr Vassella said.
“It’s such a big country and the internal costs of shipping product from the east to the west is actually very high.
“The west coast market effectively operates as a 100 per cent import market. There’s no flat products manufacturing on the west coast.
“Hence, it would have had an implication not only for us but for the other flat product manufacturers or producers on the west coast as well.”