BlueScope, the Australian-based steelmaking company will close its export business, saving steelmaking for only domestic demand. The company is closing the Port Kembla No 6 blast furnace and Western Port mill, with an expected $1 billion full-year loss. The reason for this closure is the “rising dollar, depressed steel prices, rising iron ore and coking coal prices and ailing domestic demand,” according to The Australian article. The company was expected to lose $360m in the export sector from 2011-12 if it continued on the same operating path, according to Macquarie analyst Doug Macphillamy. Mr Macphillamy estimates BlueScope loses about “$137 per tonne of steel it exports for $US668 a tonne, based on an Australian dollar exchange rate of $US1.03.”

Another article from The Australian reports an estimated 10% of steel used in Australian projects is from locally produced steel, with the remaining 90% imported from Asia.

BlueScope’s shutdown of the blast furnace and export business will cost 1,000 BlueScope jobs including plant workers and contractors. However, BHP Billiton has said its company will take applications from the former BlueScope workers.

Colin Bloomfield, BHP Billiton’s president for Illawarra Coal, said the company “will look to employ up to 50 more in a range of roles across its Illawarra coal operations…[and] in its Queensland coal operations where more than 750 job vacancies currently exist, or in our iron ore operations in Western Australia where 600 vacancies exist.”

US Department of Commerce reports in July 2011, there were 73,111 metric tons of flat rolled steel imported into the U.S. from Australia, up from 20,515 metric tons imported in June 2011. Australian imports for July is only slighter smaller than the current largest import country of Korea with 82,093 metric tons in July. Now with BlueScope no longer exporting, this could seriously affect the flat rolled market as BlueScope was a large exporter.

Sources: The Australian & US Department of Commerce