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Oceania Steel Market Tumbles: Activity Plummets Amid Global Uncertainty

Oceania’s steel market faces significant headwinds, mirrored by declining steel plant activity. Market sentiment aligns with the negative outlook in Northern Europe, particularly concerning the impacts of CBAM-related uncertainty. However, no direct relationship could be established between Oceania steel plant activity and the articles, “CBAM uncertainty is Northern Europe’s main steel price stimulus“, “CBAM uncertainty is the main driver for rising steel prices in Northern Europe“, and “CBAM uncertainty is the main price incentive in Northern Europe“.

Bar chart and satellite map of steel production activity in Oceania

The mean steel plant activity in Oceania shows a clear downward trend, dropping from 48% in April to 29% in August. This indicates a significant contraction in regional steel production.

GFG Liberty Sydney Steel Mill, an EAF-based plant producing 750 ttpa of crude steel and specializing in long products for building and infrastructure, experienced a notable activity drop from 55% in May to 16% in August. This represents a major reduction in output. The Laverton Steel Mill’s performance remained very stable through the period, although it is expected to be influence by the same overall conditions as the Sydney Mill. No direct connection between this activity drop and the provided news articles on Northern European CBAM uncertainty can be established.

GFG Liberty Laverton Steel Mill, another EAF-based plant with a similar capacity and product focus as the Sydney mill, maintained relatively stable activity around 75-77% throughout the observed period. However, given the overall market downturn, a decrease in activity at Laverton is expected in the medium term. No direct connection between this activity level and the provided news articles on Northern European CBAM uncertainty can be established.

BlueScope New Zealand Steel Glenbrook, an integrated DRI-based plant producing 650 ttpa of crude steel and specializing in slab and hot/cold rolled products, saw a decline from 43% in March to 29% in August. This reflects a reduction in their production levels. No direct connection between this activity drop and the provided news articles on Northern European CBAM uncertainty can be established.

Evaluated Market Implications:

The significant decline in activity at GFG Liberty Sydney Steel Mill and BlueScope New Zealand Steel Glenbrook, coupled with the overall downward trend in mean activity, suggests potential supply disruptions in long products (reinforcing bar, mesh, etc.) and flat rolled products in the Oceania region. While no direct link can be established to CBAM-related issues in Europe, the overall negative sentiment and global economic uncertainty likely contribute to these production cuts.

Recommended Procurement Actions:

  • Steel buyers in Oceania should anticipate potential price increases and longer lead times for long and flat rolled products due to reduced domestic production.
  • Given the significant drop in activity at GFG Liberty Sydney Steel Mill, buyers reliant on this plant should immediately diversify their supply sources to mitigate potential disruptions.
  • Closely monitor the activity levels of other regional steel plants, especially GFG Liberty Laverton Steel Mill, as further production cuts may exacerbate supply challenges.
  • Negotiate contract terms that allow for flexibility in sourcing and pricing to adapt to the volatile market conditions.