Indonesia will ease imports of scrap metal for steel industry

TRADE BALANCE - ​JAKARTA. The Indonesian government will ease rules on the import of scrap metal for use as raw material by the country's steel industry, hoping this will lead to a reduction in imports of steel billets, the industry minister said on Wednesday.

The Indonesian Iron & Steel Association has long complained that steel imports, particularly from China, have hurt their business, despite anti-dumping duties applied on many types of steel products from China and other countries.

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Minister Agus Gumiwang Kartasasmita said the local steel industry is now utilising only about 40% of its capacity, partly because companies don't have enough materials for production.

If the country's mills can increase their utilisation rates, they can supply 70% of domestic steel product demand, he said.

"We've decided for scrap metal, we will relax their imports ... because we can see the need for scrap metal in the domestic market," Kartasasmita said.

"This will support the production of billets," he said.

Scrap metal is currently included in the government's list of dangerous and poisonous waste. Importers of such waste must have a licence and must obtain numerous permits from the ministries of industry, environment and trade

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The new government measure would exclude scrap metal from that list, the minister said, potentially reducing the number of permits required for shipments.

Kartasasmita estimated Indonesia will import 5 million tonnes of scrap metal after the relaxation, but he did not say when the new rules would take effect.

Rising imports of steel products has hit state-controlled steel maker Krakatau Steel, who last year laid off thousands of workers amid a restructuring process.