The Indonesian Iron and Steel Industry Association (IISIA) has warned about the serious impact of Chinese steel dumping on Indonesia’s local steel sector. According to IISIA Executive Director Widodo Setiadharmaji, the influx of cheap Chinese steel poses a serious threat to local producers. Setiadharmaji expressed concerns about the potential devastation of the Indonesian steel industry if the government does not take urgent measures.
Setiadharmaji stressed that domestic steel production capacity is alarmingly underutilized, with some segments operating at sub-optimal levels, far below the 80% capacity required for efficient operations and profitability. He stressed that the sector could face major bankruptcies if intervention is not made.
In the first half of 2024, steel imports from China increased by 34% y-o-y to 2.98 million tons, and this trend is expected to worsen if protective measures are not taken.
Despite increasing domestic steel demand amid economic growth, local producers are struggling to maintain their market share and profitability. Some companies have reported significant losses in market share and no sales at all. The oversupply of Chinese steel is not only weakening their market share but also disrupting local pricing mechanisms, further exacerbating the challenges faced by Indonesian producers.
The situation requires immediate government intervention to protect the national steel industry from further losses and ensure its sustainability amid these challenging market conditions.
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