Indonesian Steel Industry Predicted to Fare Better In Q1

Jakarta, March 26 (Antara) - Executive Director of the Indonesian Association of Steel (IISIA) Edward Pinem here on Tuesday predicted the country`s steel industry would grow in the first quarter of this year. Edward said the condition will be better than in 2012 when steel industry in all countries in this regions suffered under the impact of the crisis in Europe and economic slowdown in China. Crisis has weakened demand for steel resulting in sharp fall in prices, he said. Steel industry in the regional countries including Malaysia and Thailand performed poorly in 2012, he said, adding Thailand even stopped producing steel. "That country resumed operation of its steel industry only in 2013 after settling its financial problem, " he said. He said Indonesia fares better thanks to its economic stability with a 10 percent increase in steel demand on the domestic market. However, Indonesian steel consumption is relatively low per capita compared to neighboring countries , he said, adding the consumption should be larger. He said steel production in Indonesia is used only in property and infrastructure sector , adding only a few is used by automotive industry . In Thailand automotive industry is major consumer of steel as that country has been able to produce special steel products for automotive industry. Thailand has even succeeded in exporting special steel for automotive industry, Edward said. Infrastructure development is quite brisk in Indonesia needing large supply of steel but construction of the major infrastructure projects is financed mainly by foreign financiers that require the use of steel from their countries. The country`s steel industry, therefore, is expected to grow only slightly despite a strong 7 percent economic growth expected in 2007, Edward said. He urged the government to immediately issue a regulation protecting the country`s steel industry as provided by governments of many other countries. "Protection is important amid unfavorable condition globally as a result of protracted crisis in Europe," he said. He said steel market in Indonesia is open the wider compared with steel markets in Malaysia, Thailand, and Vietnam, which even gave strong protection for their industries. Tens even hundreds of traders easily import steel into the country disrupting stability on the domestic market, he stated. According to him, many of the importers claimed that their steel products contain boron as said in their import document and they would be given a cut in import duty without test. "In other countries sample would be taken to be tested to confirm such claim," he said, adding if found that the claim was false, the importers would be punished with high import duty or their goods may not be allowed to be unloaded . He said in Indonesia, protection given by the government is only in the form of the requirement to use the label of the Indonesian National Standard (SNI). SNI does not require test to determine whether imported steel contain boron or not although the testing instrument is already available in the country , he said. He said if the government issues a regulation requiring all imported steel to go through boron test, the customs office could determine the import duty on steel containing boron and one not containing the chemical. He said the policy allowing loose control of imports would cause market distortion hurting the domestic steel industry amid the sluggish market. The government needs to issue a policy to protect the country basic steel industry otherwise the industry would not survive and eventually be defunct, he said. He said Thailand, a major steel producer in this region was quick to react to any suspected unfair business practice by slapping a temporary import duty while carrying out investigation. Malaysia has also adopted a strict regulation on steel import license, he said.