Steel industry demands export ban, objects to zero import tariffs<\/p>\n
Dewi Santoso, The Jakarta Post, Jakarta<\/p>\n
The government should ban steel exports rather than increasing
\nimport tariffs to overcome the supply shortages in the domestic
\nmarket, an industrial executive said.<\/p>\n
The marketing director of state-owned PT Krakatau Steel, Kemal
\nMasduki, said on Friday that lifting tariffs was not a wise
\ndecision as it would only hurt the industry both upstream and
\ndownstream, and would cause second-grade steel from other
\ncountries to enter the local market.<\/p>\n
\"If the tariffs are reduced to zero percent, defective
\nsecondary products will enter the country at much lower prices,\"
\nKemal said.<\/p>\n
Minister of Industry and Trade Rini M.S. Soewandi announced on
\nWednesday the government, in response to steel shortages around
\nthe world, planned to lift import tariffs on steel to help ease
\nthe burden on local companies that used steel as raw material.<\/p>\n
Currently, the import tariffs on steel stand at 20 percent for
\nhot rolled coil (HRC) and 25 percent for cold rolled coil (CRC).<\/p>\n
Kemal expressed fear that steel from China and India could
\nswamp the country, as the Chinese government gave companies an
\nincentive of 15 percent for exports, and the Indian government 10
\npercent.<\/p>\n
He explained that Indonesian steel producers now sell 90
\npercent of their products on the local market and export the
\nremainder.<\/p>\n
\"If exports are banned, then the 10 percent of local
\nproduction that is currently exported can be directed to the
\ndomestic market,\" he told The Jakarta Post.<\/p>\n
He acknowledged that even if there was an export ban,
\nIndonesia would still have to import steel as local production
\ncould not meet local demand.<\/p>\n
South Korea, which also faces a shortage of steel in its
\ndomestic market, has implemented an export ban.<\/p>\n
Worldwide steel shortages, driven by the bullish economy in
\nChina and reconstruction in Iraq, have caused the global prices
\nof steel products to rise by more than 100 percent to an average
\nof US$630 per ton from $310 per ton in December last year.<\/p>\n
Kemal said the international price of HRC had increased by 93
\npercent to $580 per ton from $300 last year, and the price of CRC
\nhad increased by 46 percent to $630 per ton from $430.<\/p>\n
He said the increase in global prices had caused an increase
\nin the domestic prices of HRC and CRC.<\/p>\n
The domestic price of HRC now stands at about Rp 5,000 (58 US
\ncents) per kilogram, up 53 percent from Rp 3,250 last year. The
\nprice of CRC has reached Rp 6,000 per kilogram, up 33 percent
\nfrom Rp 4,500 last year.<\/p>\n
\"The prices keep changing every month, making it difficult to
\nsign deals with buyers, including pipe producers,\" Kemal told the
\nPost, adding that he was pessimistic things would improve soon.
\n\"At least not within the next three months.\"<\/p>\n
The secretary-general of the Indonesian Steel Pipe
\nAssociation, Untung Yusuf, said he had to increase the prices of
\nhis products by an average of 30 percent during the last three
\nmonths due to rising international prices.<\/p>\n
He said that currently the price of pipe was about $773 per
\nton, and could rise to as high as $900.<\/p>\n
\"It has been a month since we have had any transactions
\nbecause the prices have skyrocketed. And with no import tariffs,
\nit will be easier for second-grade foreign products to come into
\nthe country at cheaper prices, threatening our industry with
\nbankruptcy as we can't compete with those prices,\" Untung said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/steel-industry-demands-export-ban-objects-to-zero-import-tariffs-1447893297",
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"sponsor_url": "https:\/\/okusiassociates.com"
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