Import duty on steel lifted

The Jakarta Post, Jakarta

After months of heated public debate, the government finally announced on Thursday that it would eliminate import duties on hot rolled coil (HRC) and cold rolled coil (CRC), two key steel products, for one year starting on April 1.

The Ministry of Finance said in a press statement that the new policy was needed to help local firms deal with the current global shortage of steel.

The import duty on HRC currently stands at 20 percent, while on CRC it stands at 25 percent.

The ministry said that global steel prices have been on the rise since December last year amid surging demand, while supply remains limited.

Industry experts have said that strong demand, particularly in the fast growing economy of China, Russia and Iraq (which is entering its reconstruction phase) had driven prices higher.

A number of firms had previously called on the Ministry of Finance to scrap import duties to make imports more affordable. The Ministry of Industry and Trade previously dropped a ruling which limited steel imports to help ease the problem.

But local steel products have opposed the demand, saying that such a move would hurt their business at home.

The price of steel (HRC) in the international market at the end of December last year surged to around US$400 per ton, while steel imported by China for delivery in April 2004 surged to $450 per ton.