The lack of continuous casting machines in IF factories makes it difficult for these factories to take part in public projects. Because public projects require continuous cast steel. IISIA avoids opposing IF plant operations until electric arc furnace (EAF) and blast furnace (BF) plants adequately meet national demand.
However, the price differential between IF and BF/EAF steel ensures continued demand for IF steel. This complicates the solution to the problem. The government is taking steps to enforce air pollution controls. This includes inspections of steel mills in Jakarta.
It is also difficult to monitor potential low-quality steel production at IF plants. There have been reported cases of mills offering high quality products during SNI registration tests and then producing lower quality steel without continuous monitoring. The situation is further complicated by selective procurement practices that offer different steel grades for different projects.
The closure of IF plants could significantly impact Indonesia's steel production. An estimated minimum of 50% of the total 8-9 million tons of rebar produced at these mills will play an important role in supporting the country's economic growth.
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