The Deputy Minister of Industry recently pointed out at a working meeting of Commission VI of the House of Representatives that Indonesia's steel industry faces a severe supply-demand imbalance, with approximately 55% of domestic demand relying on imports, most of which come from China, while the domestic steel industry's capacity utilization rate is only about 50%, resulting in significant idle capacity.
The root cause lies in the singular production structure, with domestic steel production mainly concentrated in construction and infrastructure sectors. Production of specialty steel required for high-value-added fields such as automotive, shipbuilding, and heavy machinery is limited, despite substantial market demand for such steel. Furthermore, Indonesia's steel industry also faces aging production equipment, with most manufacturers using outdated machinery and technology, insufficient environmental performance, affecting product quality and production costs, and reducing industrial competitiveness.
Data shows that in 2024, Indonesia ranked 14th globally in steel production with 18 million tons, an increase of 110% from 2019. However, global steel output totaled 1.084 billion tons, with China being the largest producer accounting for 53.3%, followed by India. Indonesia's steel industry has an average capacity utilization rate of 52.70%.
The Deputy Minister of Industry recently pointed out at a working meeting of Commission VI of the House of Representatives that Indonesia's steel industry faces a severe supply-demand imbalance, with approximately 55% of domestic demand relying on imports, most of which come from China, while the domestic steel industry's capacity utilization rate is only about 50%, resulting in significant idle capacity.
The root cause lies in the singular production structure, with domestic steel production mainly concentrated in construction and infrastructure sectors. Production of specialty steel required for high-value-added fields such as automotive, shipbuilding, and heavy machinery is limited, despite substantial market demand for such steel. Furthermore, Indonesia's steel industry also faces aging production equipment, with most manufacturers using outdated machinery and technology, insufficient environmental performance, affecting product quality and production costs, and reducing industrial competitiveness.
Data shows that in 2024, Indonesia ranked 14th globally in steel production with 18 million tons, an increase of 110% from 2019. However, global steel output totaled 1.084 billion tons, with China being the largest producer accounting for 53.3%, followed by India. Indonesia's steel industry has an average capacity utilization rate of 52.70%.