Steel Entrepreneurs Warn of Threat from China Potentially Blocking Indonesia

The national steel industry is facing pressure from rising import volumes amid weakening steel demand in several major world markets. This condition is a concern because cheap steel products from countries with large production capacity could potentially seek new markets, including Indonesia.

Executive Director of The Indonesian Iron & Steel Industry Association (IISIA) Harry Warganegara said that the condition of Indonesia’s steel market cannot be simplified merely by comparing the aggregate share of local and imported products. Differences in type, specification, and domestic production capacity make the competitive landscape different for each product.

“For market share between domestic and imported products, we have not used a single aggregate figure because the composition of steel products is very diverse and import needs differ according to type, grade, specification, and domestic production capability. Therefore, the division would be more accurately viewed per product group,” Harry told CNBC Indonesia on Wednesday (26/8/26).

Trade data shows that import pressure has become increasingly visible throughout the first half of 2026. At the same time, Indonesia’s exports of iron and steel products have actually declined compared to the same period the previous year.

Based on BPS trade data processed by IISIA, the export volume of iron and steel under HS 72 in Semester I 2026 reached 10.46 million tonnes, down 7.48% compared to 11.30 million tonnes in Semester I 2025. Conversely, import volume reached 7.94 million tonnes, up 13.65% from 6.99 million tonnes.

This shift in trade flows occurred while China’s steel market was still facing domestic demand problems. China’s HRC export price on 10-14 August weakened again to around US$481 per tonne FOB, while buyers in the international market continued to press prices.

This pressure should not only be viewed from HRC movements. Shifts in product types, specifications, and export destination countries could be another route for steel products to enter the Indonesian market.

“China’s steel industry is still facing excess capacity and weak domestic demand, so the pressure to seek export markets remains high. This condition could increase the potential for export diversion to various markets, including Indonesia,” said Harry.