DOMESTIC STEEL INDUSTRY HAS EXCESS STOCK OF 2.5 MILLION TONS

Jakarta, Feb 20 (ANTARA) - Indonesia's domestic steel industry is holding an excess production stock of 2.5 million tons due to declining exports and domestic demand as a result of the current global economic crisis.

"They (IISIA) said to have around 2.5 million tons in excess stock of long and flat products of various sizes. That was the posistion unveiled yesterday during a meeting with the trade minister," the director of metal industry of the ministry of industry, I.G. Putu Suryawirawan, said here on Thursday.
He said the condition was dangerous with regard to the continuation of domestic steel industry because the excess stock comprised half of the national production. The installed capacity of around 100 national steel plants reached six million tons while its utilization reached four million tons a year.
"If we do not take any action our plants may close down in the middle of this year," he said.
In view of that he said the government push domestic demand by requiring use of local products in all government projects. He said imports would be also monitored to avoid excess.
"There must not be too many products coming from outside the country meaning that price dumping must never happen here. In short illegal imports and dumping must be prevented," he said.
He said the industry ministry was now still listing local products that had to be used in government projects.
"We are still making the list. There are many kinds of products in the metal sector including alluminium and steel. Identification of government projects that could increase their absorption of domestic products is now also still being carried out," he said.
He said a ministerial decree would later be issued on a list of products that should be given a priority for use in government projects.