Glenbrook eyes cuts as steel tariffs bite

By ELLEN READ

Glenbrook steel mill is looking for ways to cut costs to ensure it remains internationally competitive.

The move comes as the country's biggest steel producer, owned by BHP, begins to suffer from import tariffs imposed on its United States exports last month and a strengthening New Zealand dollar.

BHP's NZ Steel mill exports around 60 per cent of production from its Glenbrook mill to the United States, which in March placed a 30 per cent tariff on steel imports to protect domestic steel manufacturers.

Since then, similar protective tariffs have been imposed in some Asian countries, Canada and Europe and the New Zealand currency had strengthened.

Glenbrook has already increased its prices in some markets with some success but is now considering redundancies, reducing overheads and cutting overtime.

"What we're seeing is the whole world reacting to the United States. It's protectionism gone mad," BHP NZ Steel marketing vice-president Mike Gundy said of the rise in steel tariffs around the world.

"Staff cuts are being considered but at this point that's probably two to three months away," he said.

Gundy said staff were being kept informed of developments and asked for ideas to reduce costs.

He said the company remained wary of steel dumping, and would seek Government help in monitoring the levels of steel imports.

The United States duties range from an 8 per cent tariff on imports of stainless-steel wire to 30 per cent on plate and tin mill products.

BHP NZ Steel, manufactures hot rolled steel sheet and coil, cold rolled steel sheet and coil, and a range of pipe and hollow sections.

Its products are among those attracting the highest US tariffs.

The US tariffs exclude members of the North American Free Trade Agreement, including Canada and Mexico, and developing nations.