An Anti-Dumping Commission inquiry has found Australia's steel and aluminium industries can't compete on a level playing field with dumped Asian exports, especially from China.
In a report released on Friday night, the commission found Asian government subsidies and their support for loss-making state-owned enterprises had resulted in unsustainably low export prices.
"The ongoing significant global over-supply has depressed steel and aluminium prices, resulting in prolonged difficult trading conditions for steel and aluminium producers generally, including in Australia," it said.
Australia's two steel producers, Arrium at Whyalla in South Australia and BlueScope at Port Kemble in NSW, have been hard hit by domestic downturn in demand and global over-production. The same applies for aluminium production.
Prices for both commodities are now half pre-global financial crisis peaks.
The report says the nature and extent of Chinese market interventions, coupled with the sheer size of China's production, has made a significant contribution to current global over-capacity and persistent imbalance between production and demand.
Those interventions include subsidising the costs of raw materials and power, tax rebates, cheap finance and sustained support for unprofitable state enterprises.
The Commission said it's analysis supports a finding that economically inefficient market interventions in Asia and other regions have amplified and were likely to have extended duration of very difficult operating conditions faced by the Australian industries.
"The Australian industry cannot compete on a level playing field with dumped and subsidised Asian exports," it said.
The report didn't recommend specific measures, although it said the anti-dumping system was generally effective in addressing proven cases of dumping and subsidisation
Since 2010, Australia has taken 43 trade remedy measures over steel and aluminium imports, including 21 for China.
Labor industry spokesman Kim Carr said the government must explain how it proposed to improve the anti-dumping system and support Australian steel industry jobs.
"Industries and workers are harmed when goods from overseas are dumped into the Australian market and when overseas exporters try to circumvent Australia's anti-dumping rules," he said in a statement.
