Lifting of import duty on steel welcomed

Urip Hudiono, The Jakarta Post, Jakarta

The government might extend the recent lifting of import duties on hot-rolled coil (HRC) and cold-rolled coil (CRC) steel if their price in the international market remains high.

"It could be extended if global steel prices stay aloft," said Minister of Industry and Trade Rini Soewandi, as quoted by Antara on Friday.

The Ministry of Finance announced on Thursday the lifting of import duties on the two key steel products for a year, as of April 1. The import duty on HRC was previously 20 percent, and that on CRC 25 percent.

The policy was taken to help local firms deal with the current global shortage of steel and its rising demand, particularly in China, Russia and Iraq, which has driven the price of steel (HRC) up to about US$400 per ton since December last year.

The situation, explained Rini, disrupted local construction, machinery and the electronics industries, as well as steel product manufacturers, all of which have mostly been using imported steel.

The Ministry of Industry and Trade previously dropped a ruling that limited steel imports to help ease the problem.

The firms, however, were not satisfied with the ruling and continued to demand the scrapping of steel import duties.

Local steel producers, on the other hand, objected to the policy and the industries' the steel-using industries' demands, saying that such a move would only hurt their business.

After much heated public debate, the ministry then gave in to the firms and proposed that the Ministry of Finance issue the recent decree lifting the duties.