A new report from the McKell Institute’s SA branch has found that Australia would become dangerously dependent on Chinese steel imports if the Whyalla steelworks were to fail.
The new research identifies that the collapse of Whyalla steel would leave Australia with a nation-wide inability to produce long steel products. This would render Australia one of the very few advanced economies without any sovereign capacity to support its domestic infrastructure needs.
Among the report’s findings:
- Long steel is vital for Australia’s transport, defence, construction and manufacturing industries
- Whyalla steel is the only steelworks in the country capable of producing long steel
- In 2024, 40 per cent of Australia’s long steel products were imported from China, rising from 28 per cent in 2013
- Should Whyalla fail, Australia’s inability to produce long steel products would expose the nation to heightened influence and coercion from strategic adversaries
- Australia’s defence capacity and national security depend on the Whyalla Steelworks – its output means Australia can better respond to strategic emergencies, is less exposed to supply chain disruptions, and can resist coercion by adversarial trading partners
- Should the Whyalla Steelworks fail, Australia would not have the capacity to reestablish a replacement industry in the foreseeable future due to the limited number of workers with the requisite skills outside the Whyalla region. This includes not only the directly employed workers at the steelworks, but also those employed in the broader supply chain feeding into the steelworks.
- To allow the Steelworks to fail would be inconsistent with the Commonwealth’s Future Made in Australia strategy – Australia’s broader capacity to manufacture is heavily dependent on the products made in Whyalla
Ed Cavanough, CEO, The McKell Institute:
“The Whyalla Steelworks Australia’s is the only manufacturer of ‘long steel’ products which are core inputs into Australia’s transport, construction and manufacturing industries. They are even more crucial as Australia confronts burgeoning public infrastructure projects and a housing crisis, and aspires towards a manufacturing resurgence.
“If Whyalla steel fails, Australia would become dependent on imports for long steel. That would leave us completely exposed to coercion from strategic adversaries. We had a taste of what this looks like in 2021, when the Chinese Government imposed tariffs and trade restrictions on key Australian export sectors.
“Australia’s defence capacity and national security depend on the Whyalla Steelworks – its output means Australia can better respond to strategic emergencies, is less exposed to supply chain disruptions, and can resist coercion by adversarial trading partners.
“The crucial fact is that the Whyalla steelworks are far too important to the national interest to be left to the whims of a very capricious private owner. We should leave this Mr Gupta to focus on recapitalising his Vaucluse mansion, instead of relying on him to recapitalise a vital asset for Australia’s economy.
“If the federal government’s Future Made in Australia strategy is to mean anything then Australia must be able to produce its own long steel. Without it our sovereign capability is basically worthless.
“Steel production is a fundamental building block of economic sovereignty.”
Contact details:
Lauren Ferri: 0422 581 506 // [email protected]
