U.S. orders for RI steel products stop

Adianto P. Simamora, The Jakarta Post, Jakarta

Purchase orders for Indonesian steel pipe products from the vital U.S. market stopped when the U.S. economy plunged into recession, the Indonesian Steel Pipe Manufacturers Association (Gapipa) said.

"We have not received any orders from American buyers for fourth quarter shipment," Gapipa secretary general Untung Yusuf told The Jakarta Post, adding that orders should have been submitted in September.

He also predicted that no shipments would take place in the first quarter of next year, with the U.S. economy still expected to be in the doldrums.

Untung said that about 70 percent of the country's total steel pipe exports of 40,000 tons last year went to the U.S. market, with the remainder going to Australia.

Untung called on the government to implement measures to protect against the influx of cheaper imported products from China and South Korea amid the weakening export market.

"The government should venture to take measures to avoid the local market from being flooded with cheaper imported products," he said.

Untung said that Gapipa had formally conveyed these concerns to the government and asked for protection, but the government had, so far, taken no action.

"We are now facing difficulties competing with imported steel pipe products, because their prices are about 30 percent lower than locally made products," he said.

He said that the country's steel pipe output was expected to decline by between 20 percent and 25 percent this year, compared with last year's figure of 260,000 tons.