"Given its offshore peers have confirmed similar challenging trading patterns both across Asia and North America, we think it is not surprising to see BlueScope downgrade its 1H25 guidance today," Mr Birrell says.

"With Chinese steel exports remaining elevated for over 12 months now, the seaborne steel market remains in oversupply, placing material downward pressure on steel prices and spreads, and we are continuing to see the pressure on regional steel producers.

"For BlueScope's Australian business, it has received some protection from the lower Australian dollar which has kept import parity price high; however, there are concerns that a rising Australian dollar in coming months may remove these protections.

"On that front, it is important to see that BlueScope has confirmed the productivity and cost-out program with this update, and importantly revealed the $200m target. This target is designed to ensure that the Port Kembla steelworks remains break-even at bottom of the cycle floor spreads, and therefore should adequately leverage any recovery.

"We previously highlighted that we expect the current challenging global steel market to continue for some time, and that FY25 would represent the trough for the company's earnings.

"While there is an unlikely quick fix coming, we expect that through time the pressures on the macro environment to incrementally ease, and for BlueScope to further its 'self help' programmes to remove excess costs and improve efficiencies.