Latest news with #MarkVassella
Sky News AU
a day ago
- Business
- Sky News AU
BlueScope chief executive Mark Vassella warns Labor, 'if we lose manufacturing, it won't come back' as energy costs bite
An Australian manufacturing boss has lamented energy costs which are 'three to four times more expensive' than in North America and raised alarms about the future of manufacturing in Australia after his company's profit sank. Steel manufacturer BlueScope reported a $722m profit drop to $84m for the 2025 financial year as it wrote down the value of a major US business by $439m. While the company suffered a blow in the US, it also struggles with massive energy costs in Australia that plagues all manufacturers, BlueScope's CEO Mark Vassella said on Business Now. 'As we've called out this morning in the results, and as part of the gas submission we've made to the federal government, right now energy costs in Australia are three to four times more expensive than they are in North America,' Mr Vassella said on Monday. BlueScope advocated for a domestic gas-reservation scheme and has opposed the idea of importing liquefied natural gas (LNG) into Australia, which may be a reality as shortfalls loom across the east coast. Mr Vassella said competitive energy prices were critical to driving investment and capital and stressed Australia's energy woes were a major inhibitor. 'That is a hurdle and a burden in Australia, which is why we've gone a bit on the front foot today around energy costs,' the BlueScope boss said. 'We need to drive change in energy costs in Australia.' Another major concern weighing on Mr Vassella was what could happen if Australia's manufacturing industry were to collapse. 'When you're a small market like Australia … when manufacturing capacity goes it's very unlikely that it would ever return,' he said. 'We saw that with the automotive industry. 'What you're now seeing in the US, on the back of the current administration's tariff position, is we have companies from all over the world investing in the US because it is competitive but also because it's a very large market so you have the benefit of scale. 'So that is a real 'watch out' for Australia. If we lose manufacturing capacity here, it won't come back.' The warning from the boss of BlueScope, which is looking to purchase the Whyalla Steelworks with a consortium of Asian investors, comes as an array of manufacturers have warned they are on the brink of collapse over the past year. Nyrstar, which refines lead and Zinc in Hobart and Port Pirie, will receive a $135m bailout from the federal, South Australian and Tasmanian governments as it struggles with alleged market distortions by China. Rio Tinto-owned Tomago, which is Australia's largest aluminium producer, is seeking billions of dollars from the federal and NSW governments amid high power prices and as cost-effective and consistent renewables remain largely unavailable. Meanwhile, Queensland resources company Glencore is considering halting operations, putting about 17,000 jobs at risk.
Wall Street Journal
2 days ago
- Business
- Wall Street Journal
BlueScope Steel Studying Whether It Could Buy, Not Build, More U.S. Growth
BlueScope Steel BSL -3.14%decrease; red down pointing triangle is considering whether it could buy a midstream U.S. steelmaking operation before making a decision on a postponed $1.2 billion investment in the Midwest, said Chief Executive Mark Vassella. The Australia-based steelmaker, whose U.S. operations include an Ohio steel plant, in February deferred a planned cold-rolling and metal-coating investment because of heightened market uncertainty. The American steel industry is being reshaped by punitive new tariffs on imported steel and the takeover of Pittsburgh-based U.S. Steel by Japanese giant Nippon Steel, which was completed in June.
ABC News
2 days ago
- Business
- ABC News
BlueScope warns soaring energy costs threaten Australian manufacturing as profit drops 90pc
BlueScope has sounded the alarm over Australia's energy crisis, warning that unsustainably high gas prices are pushing domestic manufacturing to a "tipping point". The steelmaker has reported a full year profit of $84 million, a 90 per cent drop from the $721 million reported a year ago. Speaking after the company's AGM, BlueScope CEO Mark Vassella said energy costs in Australia are now three to four times higher than in the US and risked undermining the country's Future Made in Australia vision. Mr Vassella said BlueScope had submitted a detailed response to the federal government's Gas Market Review including suggested immediate and long-term changes. "LNG spot cargos going offshore should come back to the domestic market, exporters not buying domestic gas and re-exporting, and then longer term we need structural reform," he said. BlueScope's neighbour Squadron Energy is planning to impart gas through its Port Kembla Energy Terminal, but Mr Vasella ridiculed the idea of Australia needing to import gas. "In what world does exporting LNG in massive quantities only to reimport to supply a shorted domestic market make any sense?" he said. Mr Vassella said Australia still needed more reliable and affordable renewable energy after the last remaining proponent of the proposed Illawarra offshore wind project abandoned it this month amid a global investor retreat. BlueScope had previously lodged a submission in support of the project. "We need more energy, we need it to be renewable, we need it to be reliable, we need it to be affordable," Mr Vassella said. "And we were supportive of the wind industry. Our products go into the wind farm industry." He acknowledged the challenges facing developers but stressed that all energy projects come with a cost, and even so should be judged on whether they represent the "least-cost option". The sharp downturn in profits was mainly due to a $439 million write-down in its US coated products business. CEO Mark Vassella described tariffs as a "moving feast" for the steel industry. Mr Vassella said a recently proposed 50 per cent tariff on Brazilian pig iron, which was later reversed, highlighted the volatility of trade policy. He said while some tariffs negatively affected Australian exports, BlueScope benefited from its multi-domestic strategy, particularly in North America, where local production shields it from price swings. "There's a lot of movement, lots of volatility and variability," he said. While energy costs dominated the national conversation, BlueScope was also eyeing opportunities closer to home, including the future of the Whyalla Steelworks. Mr Vassella expressed cautious excitement about the steelmaker's offer to step in and support the steelworks. BlueScope has assembled a consortium with global steelmakers including Nippon Steel, JSW Steel, and POSCO to bid for the facility. The consortium aims to transform Whyalla into a hub for low-emissions steel production, aligning with Australia's broader industrial strategy "This is a wicked problem, and one we are not [yet] committed to doing anything at all," he said. "We've got optionality, we've got the right partners. "There's a bunch of work to determine what future or structure steelmaking might look like in Whyalla."
Reuters
2 days ago
- Business
- Reuters
Australia's BlueScope logs profit plunge as tariff 'maze' hits demand, forces writedown
Aug 18 (Reuters) - Australian steel producer Bluescope ( opens new tab said annual profit plummeted 90%, blaming a "maze" of tariffs imposed by U.S. President Donald Trump for lower demand and a hefty writedown on the value of its U.S. metal coatings unit. Shares in the company slid 5%, though Bluescope reiterated its position that it stands to benefit from higher prices due to its interests in the U.S., and forecast growth in first-half profit for the current financial year. Underperformance from BlueScope Coated Products, a U.S. business it bought for $500 million three years ago, led to an impairment charge of A$438.9 million ($285 million). But even without the writedown, underlying profit for the year to end-June halved to A$420.8 million, missing a Visible Alpha consensus estimate of A$466.4 million. Total net profit slumped to A$83.8 million from A$805.7 million. "It is a bit of a maze," CEO Mark Vassella told journalists on a call, referring to U.S. tariffs, which he said sometimes were announced but did not materialise. "There's lots of movement, there's lots of volatility and variability. It's had some impact on demand as people just try and understand what the implications are before they make commitments or bets on inventory." BlueScope has said it considers itself a net beneficiary of the tariffs because it ships a small amount of steel from Australia to the U.S. relative to what it produces in the United States. But on Monday, Vassella said the coatings business also sources some raw product from Australia and New Zealand, incurring tariffs. "What we're now doing is thinking about alternatives for substrate supply," he said, using the term for base material. BlueScope's North America division, its biggest earner, posted underlying earnings of A$514.4 million for the year, down 45%, mostly due to lower selling prices. "With impairment of US coated products business (there is) a recognition that there's no quick fix here," Citi analysts wrote in a client note. Noting that its main U.S. business is starting to see an improvement in profit margins as a result of tariffs driving prices up, the company forecast underlying operating earnings for the first half of 2026 between A$550 million and A$620 million, above last year's A$309 million. The midpoint of the range, however, fell short of a Visible Alpha consensus of A$618 million. BlueScope declared a final dividend of 30 Australian cents per share, in line with last year. ($1 = 1.5352 Australian dollars)
AU Financial Review
2 days ago
- Business
- AU Financial Review
BlueScope Steel stumbles in US, warns on gas prices
Australia's largest steelmaker BlueScope has reported a sharp drop in annual profit after writing off two-thirds of the value of its steel coatings business in the United States, which it acquired for $670 million in 2022. Chief executive Mark Vassella also warned that Australian manufacturing was under threat from gas prices that are three to four times higher than in the US and the Middle East, calling for an immediate domestic gas reservation policy.
