April 6, 2009

Embattled Canadian steelmakers ask federal government for help

TORONTO

Canadian steelmakers were in Ottawa last week asking the government to develop policies that will boost their industry through a stronger manufacturing base and fair trade practices.

The steel industry has been battered by the worldwide recession, which has cut demand for the metal used in everything from construction to the auto and appliance industries. As a result, global production of the most common type of steel shrunk by approximately 27 per cent in 2008.

“We need to stimulate demand across the economy, because we’re tied to so many forms of ultimate demand, whether it’s autos, whether it’s forestry, whether it’s mining, whatever it is, they all use steel,” Canadian Steel Producers Association president Ron Watkins said in an interview from Ottawa.

Watkins said the steel industry’s capacity utilization has fallen to below 50 per cent in the past six months, resulting in cutbacks at many of Canada’s biggest steel producers.

U.S. Steel announced last month that it will indefinitely idle operations at its Hamilton and Lake Erie plants, putting 1,500 people out of work. The closures were the first time the company formerly known as Stelco has shut down its Ontario steel mills in nearly a century of operations.

U.S. Steel already shut down its Hamilton blast furnace in November, laying off an additional 700 employees. Steel production and prices, which reached all-time highs last year, have dropped to their lowest levels in a quarter century in recent months.

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