Jakarta – The Indonesian Iron and Steel Industry Association (IISIA) has expressed concern over the large influx of imported steel amid the declining national steel industry marked by the need to restructure state-owned steel maker PT Krakatau Steels.
IISIA executive director Yerry Idroes said the increase in steel imports had not only occurred in upstream products such as hot rolled coil/plate, cold rolled coil and wire rod, but also in downstream products such as coated sheet.
"Statistics Indonesia records that from January to March, imports of iron and steel grew 14.75 percent year-on-year to US$2.76 billion. [Steel and iron] imports were the fourth-largest [compared to other commodities]," he said as quoted by kontan.co.id.
The South East Asia Iron and Steel Institute (SEAISI) recorded that Indonesia's steel imports in 2018 reached 7.6 million tons worth $10.25 billion, representing 6.45 percent of all imports and the third-largest commodity import.
SEAISI data also showed that from January to March, imports of mixed steel from China, particularly hot rolled coil, increased 83 percent yoy to 147,000 tons.
Yerry explained the large increase in steel imports in the first quarter of 2019 was triggered by the existence of an import agreement letter (SPI) by the Trade Ministry on the import quota for carbon steels and other mixed steels.
Because of the letter, foreign steel producers conducted circumvention to avoid high tariffs by including a small portion of other substances such as boron and chromium into their products so that they were included in the mixed steels category.
"In 2018, imports of mixed steel such as alloy steel reached 2.9 million tons. The national steel industry was seriously affected [by the influx of imported steel]," Yerry said, adding that the association along with other national steel producers had reported the problem to the government. (bbn)