Shares in Australia’s
largest steel maker BlueScope Steel slumped 12% yesterday after it cut earnings
guidance for the second time in four months, blaming weak Asian steel prices on
the back of over-production in global powerhouse China,
reportsThe Australian.

It’s been apparent for some time that BlueScope has been caught
in a nasty squeeze, says the paper’s Bryan Frith,
so yesterday’s earnings downgrade of itself wasn’t a surprise, but the extent
of the downgrade was. The massive Chinese output has BlueScope squeezed in a
classic pincer, says Elizabeth Knight in The
Sydney Morning Herald. Kirby Adams has a lot riding on the Chinese
Government honouring its undertaking to reform the country’s steel industry and
rid itself of the overproduction causing a glut in Asian markets.

But BlueScope’s profit warning shouldn’t have
shocked anyone, says John Durie in the Financial Review, given the slump in Asian steel prices over the past few
months. The cruisy ride Adams has had since 2002 – watching commodity prices rise from $320 per
tonne to $650 per tonne in just three years – is certainly over, though, and the next period will
be a real test for him and for investors.

And this morning’s Fin reports that access to Australia’s $9
billion electricity grid will be pushed onto the agenda for tomorrow’s
Australian Governments meeting, after “searing temperatures” over the
last week pushing electricity prices from an average of $40 to $10,000
per megawatt hour. The power industry wants the federal government to
push for more progress towards a national power market, urging for
stronger deregulation and a review of the anti-monopoly restrictions in
the market.

The Oz‘s Michael
Sainsbury has a question about our favourite telco: “Is there a brain drain
under way at Telstra, as it cuts back its information technology and network
staff, or is the company simply keeping up with global trends?”

Meanwhile, if the SingTel-Optus results for the nine months to March provide a backdrop to today’s Telstra interim
performance, it’s a bleak one, says Stephen Bartholomeusz in The Smage.

Australia
as a pin-up model for open markets and small government? That’s the OECD’s
latest gimmick to whip up enthusiasm for economic reform, says Tim Colebatch in The Age.

Also making business news in The SMH, Russell Crowe will be using his Oscar-winning acting skills to deliver the
family-penned eulogy at Kerry Packer’s taxpayer-funded memorial service in Sydney
this month. Nice.

On Wall Street, US stocks ended higher overnight as the
Nasdaq snapped a four-session losing streak. The Dow Jones ended just off its
high for the session, up 108.86 points at 10,858.