An era has ended !

A few days ago, BlueScopes  number six blast furnace ceased making iron and now the process of cooling and cleaning is taking place.   There was hope in the early days after the announcement that this facility would be " banked " - to allow it to remain on standby.    The fact that this option was rejected is a sure sign that the company sees no prospect of a return to full production - even on the long term horizon.

Australia steel making capacity has shrunk from three blast furnaces - to two.   There is an assumption that the Australian domestic steel market will be a mix of local production and imports, and many economists doubt that local steel can survive long term against competition from Asia.

That must cause concern to those tasked with Australia's defence.   Steel is a vital defence need.  If local steel production is ever forced to close and we are reliant on imports, then our capacity to respond to a threat depends on keeping our sea lanes open - and the hope that overseas steel suppliers are not part of that threat.

The basic idea of " Globalization " was to allow world production to stabilise on the basis of countries doing what they are good at.   On that basis, labour intensive work would become concentrated in low wage countries with big populations and skilled and technical production would remain where the work force was highly educated.

It didn't work out that way.   Education expanded quickly in low wage countries and " robotics " shrunk the labour content needed further.   As a result, we now have China and India manufacturing cars and fast learning to compete with countries like South Korea - who have made serious inroads into the traditional western car markets.

Serious world tensions remain and the threat of future wars can not be discounted.   Australia is no longer safely situated out of the way " down under " .     In fact, we are in an emerging hot spot, surrounded by countries with big populations who are under pressure to both feed and find employment for their people.

What remains of Australian steel production must be considered part of our defence needs - and not allowed to diminish further.