State steel producer PT Krakatau Steel, the country’s largest, is upbeat that the industry will pick up in 2010.
It said that even with new challenges from the recent full implementation of the ASEAN-China Free Trade Agreement (ACFTA) that prices for steel products would grow.
It said iron ore prices as well as scrap would increase thanks to the economic growth in the USA. Krakatau aims to increase its production to more than 2.8Mt of finished products, up from last year’s 2.4Mt.
The ACFTA deal would have an impact on some steel commodities but the three products mostly consumed by the domestic market — hot rolled coil (HRC), cold rolled (CR) and wire rope (WR) — would not be strongly affected in 2010.
The ACFTA, which was signed in 2004, came into full implementation on January 1 and allows the import and export of 90% of all traded goods without tariffs. Among these items are 535 steel products.
The Indonesian steel industry still has concerns over having to compete with subsidised products from China.
Source: The Jakarta Post, Jakarta; 15 Jan 2010