Soaring Steel Imports from China Is a Death Knell for National Steel Industry: IISIA
Reporter
October 9, 2024 | 07:36 pm
TEMPO.CO, Jakarta - The Indonesian Iron and Steel Industry Association (IISIA) has warned of the consequences of China's steel dumping on the nation's domestic steel industry. If the government does not promptly address this matter, the influx of cheap Chinese steel could devastate the domestic industry.
Widodo Setiadharmaji, IISIA Executive Director, said that the dumping of steel products from China haunts the national industry. He is concerned that the massive increase in imports could severely hamper the growth and profitability of domestic steel producers.
He highlighted the current underutilization of domestic steel production capacity, with some segments operating at less than 60% and even 30% capacity. This is far below the ideal utilization rate of 80%, which is necessary for efficient operations and gaining profits.
Without government intervention, Widodo cautioned that the national steel industry could face bankruptcy. “It's like a chicken dying in a rice barn,” he told Tempo on Sunday, October 6, 2024.
IISIA noted that in the first half of 2024, steel imports from China soared by 34% annually from 2.23 million tons to 2.98 million tons. This figure is expected to rise further unless the government implements protective measures.
“A flood of steel imports from China will be a death knell for the national steel industry,” Widodo declared.
Domestically, steel demand increased in line with economic growth. In 2021 following the Covid-19 pandemic, domestic steel demand reached 15.5 million tons, growing to 16.6 million tons in 2022 and 17.5 million tons in 2023. It is projected to grow by 5.7% to 18.5 million tons in 2024.
However, IISIA's internal survey revealed that domestic steel producers are struggling to sell their products. Some companies have reported a loss of market share of more than 20 percent, with some even unable to secure any sales.
The flood of China’s steel products has not only eroded market share but has also disrupted domestic pricing.
HAN REVANDA PUTRA
Editor's Choice: Indonesia's Steel Good Exports Growing Rapidly Since 2017; Reaches 5.2mn Tons in 2021
Click here to get the latest news updates from Tempo on Google News
