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Steel industry crisis
Australian Steel Institute State manager James England

The Australian Steel Institute says the full impact of OneSteel closing its Kwinana operation would be wide-reaching, with flow-on affects to be felt by suppliers to the steel company.

At least 12 steel industry workers face being unemployed this Christmas after it was announced Precision Tube would close its doors at the end of the month.

Last week, GF Engineering director Kevin Hammer told the Sound Telegraph he feared for the industry’s future in the wake of the defeated Skilled Jobs Bill 2012, which failed it to make it through State Parliament for the second time last month.

ASI State manager James England said the high Australian dollar had crippled the steel fabrication industry in recent years.

After diversifying in different steel products over the years, more recently in steel patios, Mr England said Precision Tube, which has been operating for 37 years, was a victim of the economic climate.

‘‘Now that we’ve seen the increase in the Australian dollar, the imported patio tube that is coming into the State is too cheap for the local mill to compete against,’’ he said.

‘‘We’re seeing a price difference of between $1400/tonne (locally) as opposed to $1175/tonne (imported), so our mills are unable to compete with those levels.

‘‘It’s a cut-throat market. There are a lot of people in the patio industry and they’re all competing against each other.’’

Steve Ashe is the general manager of investor relations and external affairs at Arrium, the owner of OneSteel. He said the decision to close its operations in Kwinana and Victoria came after a review of its steel business.

Mr Ashe said the review was aimed at addressing the performance of the steel business overall, the impact of operating at cyclical lows and the impact of the high Australian dollar.

Mr England said employees of Precision Tube faced an uncertain future.

‘‘It’s going to be very tough for the ones who are older. There’s going to be pretty tough times ahead for those guys,’’ he said.

‘‘It’s more a blow to the Kwinana community and to the wider industrial area because it means things aren’t as good as they should be in a State that should be powering ahead.’’

Mr Ashe said affected employees who could not be transferred within the OneSteel group would be offered redundancies.

Mr England said the Australian steel tube product market was looking ‘‘pretty sorry’’ after another competing company on the east coast, Hills Holdings, announced it was laying off 300 people.

This is the second jobs blow in the Kwinana industrial area in the past two weeks, after BHP announced it would cut 100 jobs at its Nickel West plant.