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View all search resultsCash for Krakatau Steel just first step in govt push for self-sufficiency
Impending state financing for state-owned Krakatau Steel is drawing attention to Indonesia's steel industry crisis, where low competitiveness and reliance on imports clash with the new government's push for self-sufficiency.
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A furnace operates at a nickel smelting facility of PT VDNI at the Morosi industrial estate in Konawe, Southeast Sulawesi, on Sept. 9, 2022. The company processes nickel to produce stainless steel. ( Antara/Jojon)
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mpending state financing for state-owned PT Krakatau Steel has drawn attention to Indonesia's steel industry crisis, where a lack of competitiveness and reliance on imports clash with the new government's push for self-sufficiency.
The national steel industry was operating at only around 50 percent of its capacity amid a sharp global decline in demand, Deputy Industry Minister Faisol Riza told House of Representatives Commission VI, which oversees trade and state-owned enterprises (SOEs), on Nov. 10.
He attributed the slump primarily to a worldwide downturn in the property sector, a major consumer of steel products, and presented data revealing the domestic industry’s plight:
While 562 companies are registered in base metals and 1,592 in metal goods manufacturing, their combined output is unable to meet nationwide demand, leaving a supply gap of around 55 percent to be filled by imports, mostly from China.
Read also: Indonesia rebuffs EU WTO dispute workaround amid appellate void
The global steel trade is undergoing a profound shift toward protectionism, posing a complex challenge for exporting nations. The United States has imposed a 50 percent import tariff on steel as US President Donald Trump seeks to strengthen America’s industrial base.
Meanwhile, the European Union has tightened its duty-free import quotas for steel and imposed a 50 percent tariff on volumes exceeding the limits.
