Govt to go ahead with zero steel tariff plan

Despite concerns from local steel producers, the government is determined to go ahead with its plan of lifting tariffs on steel imports to cope with the domestic supply shortage.

"The (steel) shortage will last over a year, even five years. If we don't encourage steel imports we may get no steel from supplier countries because there is now a shortage globally," Subagyo, Director General for Metal, Electronic Machines, and Various Industries at the Ministry of Industry and Trade, said on Sunday.

He said the government had held talks with supplier countries such as Poland, the Ukraine, and other ex-Soviet Union countries to guarantee a steel supply for the foreseeable future.

He said local steel producers should not be worried about the policy, because the government had made sure that local steel users would absorb their output.

"I held a meeting with people from the downstream industry, during which I urged them to buy locally made steel first. If the local supply is inadequate, then they can import steel," said Subagyo.

He said the government would not issue a decree obliging steel users to buy only locally made steel, as it believed users realized the importance of the local steel industry's survival. -- JP

Indonesian Steel Production & Consumption ___________________________________________________________________________ HOT ROLLED COIL (HRC) ___________________________________________________________________________

Year Production Consumption

(million tons) (million tons)

1999 1.0 1.5 2000 1.3 2.0 2001 1.45 2.1 2002 1.3 2.2 2003 1.0 2.3 __________________________________________________________________________ COLD ROLLED COIL (CRC) __________________________________________________________________________

Year Production Consumption

(100,000 tons) (100,000 tons)

1999 4.0 5.8 2000 4.5 9.5 2001 5.1 9.5 2002 4.0 11.0 2003 3.6 11.3 ______________________________________________________________________________

Source: PT Krakatau Steel