Thursday, 6 November 2014


The Ministry of Industry stated that domestic supply of iron and steel had not fulfilled all of the domestic need, so some steel products still had to be imported. Many policies had to be applied so as not to hold back industrial activities which needed imported raw materials. Other problems was products that must be made by different specification or could not be produced at home.

Budi Irmawan, Director of Iron-steel Basic Metal Industry, Ministry of Industry stated in Jakarta on Tuesday [30/9] that national downstream industry was growing faster than upstream industry causing under supply in domestic raw materials for intermediate industry. A condition as such was one of the causes of storming import, so solution must be sought after without disregarding national interest in broadest sense of the word. Budi said that he had to make sure that all potentials of steel industry could be maximized.

Budi stated that in case of light steel like BJLS sheets, the domestic production output was only able to cover half the demand. He mentioned that BJLS production at home was only 600.000 tons or half the need amounting to 1.2 million tons. Meanwhile BJLAS aluminium sheets could meet market need better that BJLS. BJLASW production at home came to 51,000 tons. The average demand for this type of steel was around 480,000 tons over the year.

Budi remarked further that in the application of MP3 EI Plan until 20125 it was estimated that the need for raw steel would increase by 19.2 tons while domestic industry could only supply 5.4 million tons. Data of the Ministry of industry had it that the number of steel plants was 325 units in 2012 producing 1.2 million tons of sponge iron an raw steel consisting of steel slab 1.2 million tons and steel billets 4.2 million tons.

As a whole, total raw steel production came to 5.4 million tons in 2012 while national steel consumption came to 9.2 million tons which means 3.8 million tons must be imported. Import of iron and steel including upstream products, intermediate and downstream came to USD 13.4 billion, increasing against previous year by USD 10.7 billion or equal to 22 million tons of iron steel.

The same was disclosed by Djamaluddin Tanoto, as Executive Committee of the Association of Indonesia Iron and Steel [IISIA]. He admitted that not all of demand for iron and steel was fulfilled by domestic products. Most of import was for the automotive industry. Generally domestic steel could not meet the specification of automotive industry, as they needed of high quality standard with thickness of less than 1 milimeter.

Somehow demand for construction steel or infra structure were mostly met by domestic supply. The proportion of supply of steel for export and domestic was 50:50 worth total capacity of 12 million tons per year. IISIA wished domestic steel producers to consume more local iron ore and local. The absorption was for blast furnace for producing iron. (SS)

Business New - October 3, 2014

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