Steel Producers Cuts Estimates by 30%

Rabu, 25 Juli 2012 | 09:13

National steel industry cut its production estimates by 25% - 30% by the end of this year because of difficulties in raw materials supplies. Some manufacturers have even lower steel production and employees.Based on data from Indonesian Iron and Steel Industry Association (IISIA), the domestic steel industry is capable of producing 6 million tons last year amid the product consumption which reached 8.6 million tons in the same year.

With the production target cut by 25% -30%, steel production is projected to reach only 4 million – 4.5 million tons by the end of this year.

IISIA executive director Edward R. Pinem said that thousands of tons of imported scrap metals are still stuck in the several ports so that the production was inhibited. Raw material supply difficulties have occurred since the tightening in scrap imports policy few months ago.

Poor performance that occurred during the first semester is predicted to give an impact in the second half with a 30% decline in production compared to the same period last year.

According to him, as many as 7000 containers of scrap metals were clogged on several ports ports from February 3 until June.

IISIA said the government hasn’t had a solution to overcome these problems. Policy stakeholders assumed the scrap import should go through a very rigorous examination on the port to ensure the port is free from hazardous and toxic materials (B3).

Currently, the national steel industry still relies on scrap by 70% for steel smelting raw materials and 30% other raw materials are supplied from the country. (T07/msw)

by Herdiyan