Govt issues decree to limit steel imports
Govt issues decree to limit steel imports
Adianto P. Simamora, The Jakarta Post, Jakarta
The Ministry of Industry and Trade has issued a decree to
limit the importation of steel products in a bid to help protect
the local steel industry against mass imports of cheaper
products.
Ministerial Decree No.751/2002, dated Nov. 7, stipulates that
only local steel producers will be allowed to import hot-rolled
and cold-rolled coils as raw materials or as supplements for
production purposes. The imported goods will not be allowed to be
sold or transferred to other companies, the decree said.
The measures are aimed at preventing the importation of
cheaper steel into the local market, which has inflicted losses
on local producers. Local steel producers have long demanded
protection from the government, as the cheaper imports had
severely hurt their businesses.
The decree said that authorized importers must seek approval
from the ministry for the amount and the distribution schedule of
their imports. The decree also stipulates that importers must
submit monthly reports on imported goods, the failure of which
would result in the revocation of their import licenses.
The decree came more than a week after the government
increased tariffs on imported steel products to 20 percent for
hot-rolled coil and 25 percent for cold-rolled coil.
The global steel market has also been in trouble for years due
to a surplus and a move by the U.S. this year to raise tariffs to
protect its local industry.
According to one estimate, the world's total steel output in
2000 reached 828.5 million tons, compared with a total
consumption of 812 million tons in the same year, resulting in a
surplus of about 16 million tons.
The situation forced many giant producers to dump their
products in other markets outside the U.S., including Indonesia.
Data from state-owned steelmaker PT Krakatau Steel showed that
the United States had raised their tariffs on imported steel to
30 percent, Thailand to 25 percent, India to 40 percent and
European countries had raised it to between 14 and 26 percent.
Indonesia imports steel products from Korea, Japan and
Russia.
The country's steel output reaches 2.89 million tons every
year, of which some 2.5 million tons are produced by Krakatau
Steel. Total consumption amounts to 3.9 million tons every year.