Australia’s booming construction industry could be impacted by China’s move to restrict steel production, with rising prices impacting the essential material used to build houses as well as threats to supply.

There are reports that Beijing is also planning to slap on extra taxes to steel imports, which would further push prices up, making many Aussie importers nervous about ordering from China.

It comes as Chinese traders are looking to cover themselves against any cost blowouts through new clauses in contracts with Australian importers, which would make them responsible for additional taxes levied in the future.

With Australia importing a third of its steel needs, the Australian Steel Association’s CEO David Buchanan warned the material is also becoming more challenging to source due to Covid-19’s impact on shipping causing port congestion.

“Steel prices have almost doubled in the past 12 months due to the Covid-19 pandemic impacts. Governments all over the world have sought to stimulate their economies by stimulating infrastructure and construction spending,” he told news.com.au.

“This coupled with (steel) mills slowing production due to the pandemic has lead to shortages from our major trader countries for the supply of steel including China, Taiwan, South Korea, Japan and Europe.”

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