The grow of stainless steel industry in Indonesia


stainlessindonesiaAccording to the Indonesian Iron and Steel Industry Association (IISIA) the country’s stainless steel industry could grow aggressively over the next few years as demand from infrastructure projects is forecast to surge, Rajesh Khosla, a member of IISIA, said on the weekend that the national stainless steel industry would likely grow rapidly in the next five to seven years, driven by the growing use of steel in infrastructure projects.

“It is estimated that infrastructure projects will consume more stainless steel in the future,” he told The Jakarta Post. The government is currently urging all domestic industries to boost their output of downstream products made from mineral resources and thereby add more value to their production. The administration of President Joko “Jokowi” Widodo aims to implement a number of large-scale infrastructure projects, ranging from energy production to transportation links.

Another member of the IISIA, Deepak Agarwal, said that unlike its neighbors, such as Thailand, Indonesia currently used raw steel for many infrastructure projects that would actually be better served with stainless steel. Non-rusting stainless steel is commonly used for various applications from eating utensils to water tanks.

The material — which contains a minimum chromium content of 10.5 percent — is also used in a range of infrastructure projects, such as skyscrapers, bridges and monuments. At present, Indonesia lags behind other countries in the use of stainless steel on its domestic market, Deepak said. Indonesia’s annual per-capita consumption of stainless steel amounts to merely 0.6 kilogram, a far cry from the world’s average per-capita consumption of 5.5 kg, according to IISIA estimates.

The country has an annual stainless steel production capacity of 150,000 tons, but currently produces only around 100,000 tons, according to IISIA data. That figure is far smaller than the country’s annual production of raw steel, which amounts to some 4 million tons. Rajesh said the Indonesian stainless steel industry was currently focusing on developing its domestic market, with only around 30 percent of the total output being exported. Meanwhile, the Trade Ministry’s acting director general for foreign trade, Karyanto Suprih, urged local stainless steel producers to boost their exports to Malaysia, as the neighboring country had recently stopped its antidumping investigation on imported cold-rolled stainless steel.

The Malaysian government announced in a statement dated Sept. 21 that it had ended its antidumping investigation on imported cold-rolled stainless steel from Taiwan, France, Hong Kong, Japan, China, Finland, Indonesia, South Korea and Vietnam as it had found no material injury from the import activities. IISIA’s Rajesh said, however, that the termination of the investigation would not necessarily boost Indonesia’s total stainless steel exports significantly, as only around 3 percent of national production was currently shipped to Malaysia.