URGENT UPDATE: Molycop has warned it may shut down its Newcastle operation, threatening 150 jobs as early as next month. The company cites the impact of underpriced Chinese train wheels as the main factor driving this potential closure.
Officials from the Waratah-based company, which contributes $40 million annually to the local economy, are urging the Anti-Dumping Commission (ADC) to act swiftly to prevent this devastating outcome. This move follows a recent loss of 250 jobs in September 2023, when Molycop had to close its steel-making operations due to similar challenges posed by cheap imports.
Molycop continues to produce essential steel products, including train wheels, axles, and fasteners. In a poignant letter to Regional Transport Minister Jenny Aitchison, Molycop’s general manager of rail, Gregor Dalziel, expressed deep concern over the increasing reliance on Chinese-made wheels for parts of the Sydney Trains fleet, calling it a “devastating impact” on domestic supply chains.
“It’s this increasingly uneven playing field that prompted us to speak to the ADC. The rise in underpriced Chinese rail wheels poses a real threat to the sustainability of our operations,”
Mr. Dalziel wrote, emphasizing the need for fair competition to align with Australian values.
He highlighted the troubling trend where the appointed maintainer of some fleet segments shifted procurement from Molycop to offshore suppliers, primarily from China. This shift has led to a significant drop in demand for locally manufactured wheels, despite ongoing supply agreements.
Industry Minister Tim Ayres has also weighed in, recently urging the ADC to closely monitor the impact of cheap Chinese goods on Australian industries. In a letter, he warned that the rapidly changing geostrategic environment is altering trade patterns and jeopardizing local companies.
“Our strategic and critical minerals producers; vital copper, steel and aluminium smelters; and diverse value-added fabrication industries must all be able to operate on a level playing field with imported goods,”
Ayres stated, underscoring the urgency of addressing these competitive imbalances.
Molycop’s plea emphasizes the need for immediate governmental support to ensure local procurement aligns with maintenance activities. The ADC is currently investigating 23 cases of unfair pricing, with 15 of those linked to Chinese imports, reflecting a broader trend of dumping practices as a reaction to tariffs imposed by the U.S.
As the situation develops, Molycop’s future hangs in the balance, and the potential loss of 150 jobs could have far-reaching effects on the community and local economy. The company has made it clear that it is not seeking subsidies but rather a fair opportunity to compete.
With the ADC’s investigations ongoing, all eyes are on how these developments will unfold and what measures will be taken to protect local jobs and industries. Stay tuned for more updates as this story progresses.
