Thursday, 19 March 2015


Demand for iron and steel in Indonesia was predicted at 13 million tons this year. The trend for demand was on the upturn. In 2015 the demand would be governed by policy of the Jokowi-JK Government on acceleration of infra-structure projects. Demand of 13 million tons showed there was around 8.3% growth against showed not all need was fulfilled by domestic supply, 40% of need was still imported. Production capacity of domestic crude steel was now 4 million tons, at post processing stage it became 8 million tons.

Ansar Buchari, Secretary General of the ministry of Industry stated in Jakarta on Tuesday (24/2) that demand for raw materials in four upstream mineral based mining group could grow by more than 25% by 2035. Ansari stated that exploration of natural resources for industry should be intended for strengthening of the industrial structure, to increase added value and to fulfill industry need.

As per this until 2019, the need for raw materials for the basic steel industry was estimated at 20 million tons per year. Meanwhile other upstream industry products like nickel was predicted to need 11 million tons, and aluminium around 600,000 tons per year. The four said sectors was predicted to have increasing demand for raw materials for the next 15 years.

Growth was varied by sector but on the average increase was more than 25% or oven 50% perannum. For example, in the projection of 2020-2024 demand for iron raw material increased to become 28 million tons, copper 3 million tons and alluminium 1.2 million tons per year. Trough 2015 – 2035 the need increased to 40 million tons for steel, 17 million tons for nickel and 2 million tons for aluminium. Ansari stated that in parallel with the growing need for raw materials, annual production capacity also increased. The fastest development of production capacity was the aluminium industry growing by above 60% per year.

He admitted that development of iron and steel industry at home was handicapped by low energy supply and raw materials. The steel industry still had to import raw materials from above including raw materials and scrap. And yet according to data of the Ministry of Energy and Mineral Resources iron and steel reserve in Indonesia was posted at 1.7 billion tons located in Sumatra, Kalimantan, Sulawesi and Nusa Tenggara.

Meanwhile industrialists were expected to promote technology and equipments for the steel industry to strengthen competitiveness at home and abroad. Chairman of APLINDO Ahmad Saifun admitted that the technology and equipments used by national steel industry was still interior compared to elsewhere in the world.

He showed as an example various metal products was still imported like light steel construction and alluminium by products. Of the total need of 850,000 tons of aluminium, production of raw materials was only 250,000 tons per year while the domestic steel filled with imported products. Data of SEAISi unveiled that the demand for steel last year was posted at 12.7 million tons of which 66% was to be filled with imported products. Saifun stated that minimum supply from the upstream sector was due to poor innovation and advancement of technology. (SS)

Business News - February 27, 2015

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