‘Their homes,
LAST year, the Glenbrook steel mill celebrated its 50th birthday. In December, the company threw a Christmas family picnic at the Karaka showgrounds and a Rainbow’s End fun park outing for older kids. There are family open days. Staff take time out to clean up local beaches. They hold midwinter dinners.
‘‘It’s not an environment that you’d find in many other places, particularly not in a big city,’’ says steelworker Mark Palmer. ‘‘Because they’re quite small and tight-knit communities – places like Waiuku and Pukekohe and Tuakau particularly – people play rugby and soccer together, they’re in the same tennis clubs. You work with friends, with neighbours, with people you go fishing with. It feels very close’’
New Zealand lost nearly 30,000 manufacturing jobs between the 2006 and 2013 censuses – nearly one in seven. But not from steeltown. In Tuakau, of 500 adults in paid employment at the last census, 150 were in manufacturing. That’s 30 per cent of the town’s jobs; and most of the dosh.
Like most well brought-up Kiwis, they’re a little embarrassed to talk about money – but the truth is, they’ve been on a pretty good wicket. A typical steelworker with a few years’ experience under his or her leather tool belt could be grossing $100,000 a year. Then there’s the pension, and the health scheme.
Perhaps that explains why there are families where father, then son, then grandson have worked at the mill. Husbands and wives. At one point, workers were staying an average 20 years in their mill jobs. NZ Steel’s estimated worth to the wider Franklin community is $130 million a year.
Till now. This world is changing. Tuakau and the New Zealand steel industry are being tossed about in a global melting pot.
Palmer has been working at the Glenbrook mill for 35 years, most of that on the furnaces. He’s 59. He remembers when steel was getting US$600/tonne. Iron ore was $100/tonne. Now you’re lucky to get half that.
NZ Steel’s mines at Waikato North Head and Taharoa, on the South Island’s West Coast, once provided the ironsand that built this nation. Now, New Zealand’s biggest roading project, the Waterview Connection tunnel and interchange, is being built with cheaper Chinese steel. Another 1600 tonnes of Chinese steel, used to make piles intended for four bridges along the Huntly section of the Waikato Expressway, were found to be substandard.
The popular narrative is that quality New Zealand steel is being priced out of the market by shonky Chinese product. The truth, of course, is never so simple. Indeed, one industry expert says China’s steel is good quality – though you do get what you pay for. NZ Steel mills like Pacific Steel at Otahuhu can produce perhaps 600-800 tonnes a day; similar plants in China will produce three times that with three shifts.
Either way, NZ Steel and its workers are in trouble. Steel prices are down. Iron ore prices are down. New steel mills are popping up every week in China, BEVAN READ, WARWICK SMITH / FAIRFAX NZ our biggest trading partner accounting for nearly a quarter of all our exports, China has responded by calling in some of New Zealand’s big exporters and laying the hard word on them to get the government to shut down the steel inquiry, or face the consequences. China has also begun formally consulting about using retaliatory tariffs to restrict New Zealand dairy, wool and kiwifruit exports.
That blows out the disagreement from a dispute affecting one industry, to a major threat to New Zealand trade.
Saturday, but dairy farmers don’t get a day off. Andrew Hoggard is out on his 300 hectare property on the banks of the Oroua River near Feilding, where he farms 560 cows.
He’s wary. New Zealand dairy farmers could be plunged back into the gloom of last year’s superlow milk solids payouts, if China decides to punish dairy exports to send a message to the Government.
‘‘A trade war with China is definitely not in our interests,’’ Hoggard, who also chairs Federated Farmers’ dairy group, says. ‘‘It’s about 20 per cent of our markets and we’re getting good market penetration with added value products in there.’’
In its latest global dairy update released on Thursday, Fonterra was bullish about trade with China, saying the rise in disposable income among the Chinese was increasing in ‘‘lower tier’’ cities.
UHT milk powder is now being supplied to retailers in Hebei, Jiangsu, Sichuan, Shandong and Beijing provinces through an online ordering app. At present 15,000 stores are involved, but this will increase to 50,000 by the end of the year. At the same time, Chinese demand for products from all dairy producing countries appears to be on the increase. During the last year to May, China imported 410,000 tonnes of dairy products, up 23 per cent on the year before.
While China imported 30 per cent more dairy product in May, a Fonterra spokeswoman said this could not be read as a sign that demand was necessarily increasing, as it often fluctuated during the year.
It could all change very fast, if China makes good on its retaliatory threats.
The question, then, for Hoggard: what price a principle?
Is it worth making kicking up a fuss about a little low-priced steel dumped on the New Zealand market, when that could jeopardise New Zealand’s far bigger dairy, wool and kiwifruit industries?
Hoggard said he did not know the details of Pacific Steel’s complaint ... but it was important New Zealand was seen to uphold global trade rules.
‘‘International trade rules are international trade rules,’’ he said. ‘‘People should follow them.’’ – additional reporting Vernon Small