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View all search resultsSteel industry squeezed between low demand, tight competition
The closure of steelmaker PT Krakatau Osaka Steel (KOS) has sparked fears that Indonesia’s steel industry crisis is deepening, undermining the government’s self-sufficiency push in the strategic sector.
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Krakatau Steel employees watch the production of the first hot rolled coil (HRC) steel on May 17, 2021, in the company's second hot steel mill in Banten.
T
he closure of steelmaker PT Krakatau Osaka Steel (KOS) has sparked fears that Indonesia’s steel industry crisis is worsening, undermining the government’s self-sufficiency push in the strategic sector.
KOS, a joint venture of state-owned steelmaker PT Krakatau Steel and Japan’s Osaka Steel Co, is set to fully shut down in June after halting operations in late April.
The decision was announced during a board meeting in January, as the company has been suffering from losses and a declining performance since 2022.
Indonesia’s steel industry has faced mounting pressure despite a rise in exports, which reached US$25.8 billion in 2024 and increased to $27.97 billion in 2025.
According to the Industry Ministry, an influx of cheaper goods from China and subdued demand have kept the domestic steel industry operating at only 50 percent of capacity.
Bhima Yudhistira, executive director of the Center of Economic and Law Studies (Celios), told The Jakarta Post on Monday that external and internal factors were weighing on the competitiveness of Indonesia’s steel industry.
He pointed out that the domestic industry had been lagging behind countries like India and China in producing low-carbon and premium steel.
