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Indonesia: Steel industry sees drop in demand due to COVID-19

• Tuesday, June 9, 2020
• Source:ferro-alloys.com

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• Keywords:Indonesia, Steel industry, drop, demand

[Ferro-Alloys.com] Indonesian steelmakers are facing severe impacts caused by the COVID-19 pandemic on their business with the demand having decreased by 90 percent from the normal times.

 

The low demand is partially due to the large-scale social restrictions (PSBB) imposed by the government to contain the disease outbreak, which has led to the closure of businesses, including major steel-consuming businesses in the automotive and construction industries.

 

Speaking at a conference on May 20, Tedja Sukmana Hudianto, vice president of the PT Steel Pipe Industry of Indonesia (Spindo) said the drop is very pronounced at the retail front, noting that there’s a decrease in people’s purchasing power and businesses are holding off purchasing plans.

 

The steel industry is one of the country’s strategic upstream industries, as it provides raw materials for infrastructure, manufacturing, transportation and defense, among other sectors.

 

South East Asia Iron and Steel Institute (SEAISI) data show that steel consumption in Indonesia rose 11 percent to 15.1 million tonnes in 2018. However, the demand is largely served by imports from China and other countries.

 

According to Statistics Indonesia (BPS), the country’s imports of iron and steel, accounting for 6.26 percent of Indonesia’s total non-oil and gas imports, dropped 23 percent year-on-year from January to March at 2.12 billion USD./.VNA

 

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