BlueScope Steel, the country's biggest steel maker, said last week that it could no longer afford to keep the loss-making mill at Port Kembla, near Sydney, which supplies tinplate to Australian canmakers like Visy and Amcor.

Tinplate made by coating thin rolled steel with tin is used to make cans for food and beverages.

However BlueScope said that it has seen weaker demand for its tinplate as retailers import cheaper, pre-packaged products, and manufacturers can items offshore.

In addition, today's consumers favour fresher food typically packaged in plastic or cardboard rather than cans and tins.

A spokeswoman at the group said tinplate sales had more than halved in the last 12 months to 120,000 tonnes, from 250,000 tonnes a year ago, while raw material costs had doubled.

The company was also facing a further 19 per cent rise in iron ore prices this month, on top of last year's 71 per cent price rise.

BlueScope chief executive Kirby Adams told reporters that sales had been hit by "imports of empty cans into Australia from subsidised producers, mainly in the Middle East".

The growing strength of large retailers, offering home brands, had also had an impact on food makers canning foods locally.

He said a survey had shown that 19 out of 20 tinned foods on supermarket shelves were either produced offshore, used offshore-produced cans or contained food farmed overseas.

Visy chief executive Harry Debney said that he was "disappointed" by news of the Bluescope plant's closure and "would prefer a local supplier".

The company, which will eventually source all tinplate from abroad, said it will work with new suppliers to ensure that supply of food cans is not affected.

It currently imports around 10 per cent of its tinplate requirements, a rise on the previous year as a result of Bluescope's proposed 39 per cent price increase.

Overall food can volumes in australia have declined by some 20 per cent over the past 12 months and by up to 50 per cent over the past five years, according to Visy.

Visy currently holds about 55 per cent of the Australian food can market.