Tasman Steel Reports $41 Million Net Loss Amid Rising Costs

Tasman Steel, New Zealand’s sole steel producer and operator of the Glenbrook NZ Steel mill, has announced a significant annual net loss of $41 million attributed to increased operational costs and declining sales. The company reported a gross loss of $99 million for the fiscal year ending on June 30, 2024, while total sales fell by 5% to $914 million. Concurrently, expenses rose by 4% to $934 million.

In a challenging economic environment, Tasman Steel has faced pressures similar to those experienced by numerous manufacturers in the region. High gas and electricity costs during the winter energy crunch of 2024 have severely impacted operations. Although the company has not explicitly confirmed this as the primary cause for its financial downturn, the rising energy prices have undoubtedly contributed.

Strategic Changes and Asset Sales

Despite the losses, Tasman Steel’s net loss was mitigated by a one-off gain of $40 million from asset sales. The company is currently undergoing a strategic transformation aimed at improving its sustainability and operational efficiency. This includes a significant shift in its steel production methods. Traditionally reliant on smelting iron ore, Tasman Steel plans to adopt a balanced approach, utilizing an equal mix of iron ore and scrap metal.

This transition is expected to significantly reduce the company’s carbon emissions. However, it raises concerns about the availability of scrap metal for smelters operating in other countries. To support this transformation, Tasman Steel secured government grants of up to $140 million, which will be allocated towards the installation of a new electric furnace.

According to the accounts published by the Companies Office, Tasman Steel indicated that its transformation efforts are proceeding as planned, suggesting a commitment to both environmental responsibility and operational sustainability.

As Tasman Steel navigates these financial challenges, the steel industry in New Zealand remains under scrutiny, with stakeholders closely monitoring the company’s next steps in adapting to a rapidly changing market landscape.