Indah Ayu Pujiastuti, Jakarta – More than half of Indonesia's national steel demand is still being met through imports, raising concerns over the competitiveness of domestic producers as cheaper foreign steel floods the market, according to the Indonesian Iron and Steel Industry Association.
Harry Warganegara, executive director of the association, said on Tuesday that around 55% of Indonesia's steel demand continues to rely on imported products.
He said the domestic steel industry is currently facing difficult conditions due to rising production costs and weakening demand.
As a result, domestic steel prices have remained under pressure, further squeezing company profit margins.
"At present, our factory utilization rate averages only around 52%, far below the industry's ideal level of roughly 80%," Harry said.
The situation has narrowed the room for local producers to increase output and improve factory utilization.
Harry stressed that the industry is not asking the government for excessive protection or a complete halt to imports. Instead, steel producers want authorities to create a fairer business environment and a level playing field for all market participants.
Imports are still needed for certain steel products that cannot yet be manufactured domestically or whose local supply remains insufficient, he said. However, for steel products already available in Indonesia, import controls should be implemented more firmly and selectively.
According to Harry, the government's existing steel import control policies have been an important step toward protecting the domestic industry. However, enforcement still needs to be strengthened to ensure greater effectiveness.
One of the main issues, he said, is weak supervision over imported steel products entering the country. IISIA is urging the government to tighten oversight of the harmonization system (HS) codes and product origins to prevent circumvention of trade regulations.
The association also called for stronger import monitoring both at border entry points and after products enter the domestic market to ensure imported steel complies with regulations and does not harm local manufacturers.
Strengthening national standards
IISIA also urged the government to enforce Indonesia's mandatory national standards, known as SNI, consistently across all steel products circulating in the domestic market.
"Mandatory SNI implementation is extremely important to ensure that steel products sold domestically meet the same quality and safety standards, whether they are local or imported," Harry said.
Beyond import controls, Harry said trade remedies such as anti-dumping measures play a crucial role in sustaining Indonesia's steel industry.
Anti-dumping duties are not intended to shut out imports entirely, he said, but to ensure imported products are not sold at unfairly low prices that disadvantage domestic producers.
Dumping practices distort market prices and make it increasingly difficult for local manufacturers to compete, resulting in declining factory utilization and raising the risk of production shutdowns at several plants.
"With import duties in place, national steel producers have room to compete more fairly, maintain industrial utilization rates, preserve jobs, and continue investing," Harry said.
He described stronger trade remedies as increasingly urgent amid mounting pressure from cheap imports flooding the domestic market.
Indonesia's steel industry is considered a strategic sector due to its broad links to construction, infrastructure, manufacturing, and the automotive industry.
IISIA also called on the government to strengthen the implementation of local-content requirements and policies encouraging the use of domestically produced goods, particularly in national strategic projects.
According to Harry, maximizing the use of local steel in government projects would help boost domestic demand and improve utilization across the national steel industry.
Beyond market issues, industry players are also seeking government support to address production costs, which remain a major challenge for domestic steelmakers.
Harry said high energy costs continue to be one of the industry's biggest obstacles to improving competitiveness. Stable raw material supplies are also critical to maintaining steel production amid ongoing uncertainty in global markets.