Strong Australian Dollar putting pressure on OneSteel

Strong Australian Dollar putting pressure on OneSteel

The Australian steel producer OneSteel stated that the strengthening of Australian Dollar against US Dollar puts local mills in a difficult situation. Despite the decrease in US Dollar priced inputs, such as scrap and coal, OneSteel had to take down its product prices in order to avoid detrimental effects of import competition. Besides, there has been an increase of low priced long product imports from Asia, mainly from Thailand and Taiwan. It is reported that dumping possibility of imported products will be investigated. In case Australian steel producers, like BlueScope Steel (former BHP Steel) and Smorgon Steel, evidence that they were materially injured by the dumped imports, it is likely that the government will impose duties to offset the price difference between imported and domestic products. According to forecasts, OneSteel's expected full year profit dropped from A$ 100 million down to A$ 84-A$ 96 million level.