Synopsis:
Indonesia’s demand for metals will increase by 5% in 2023, reaching 17. 9 million tonnes, enabling domestic production of 14. 4 million tonnes. However, imports of metals increased by 14% for all products classified in HS 72, mainly attributed to companies other than PT Krakatau Steel.
Article:
In a significant progression for Indonesia’s metallurgical industry, 2023 witnessed a notable increase in demand for metals. The president of the Indonesian Steel Industry Association (IISIA) and managing director of PT Krakatau Steel, Purwono Widodo, revealed the increase, resulting in an entry rate of 17. 9 million tons, representing a 5% increase through 2022.
With this point of consumption, Indonesia can now produce 14. 4 million tons of metal per year. However, there is an attractive twist to this achievement. While domestic metal production is increasing, imports of metal products under HS72 have increased by 14%. It should be noted that this increase in imports is basically attributed to companies other than PT Krakatau Steel, which historically imports raw materials.
Looking at the ancient context, IISIA officials’ knowledge shows that Indonesia’s metal imports experienced fluctuations between 2018 and 2022, heavily influenced by the COVID-19 pandemic. Before the onset of the pandemic, the volume of metal imports increased steadily, reaching a peak of 19 million tonnes in 2019. However, the pandemic caused a sharp drop in 2022, with imports falling to 14. 1 million tonnes. Subsequently, import volumes resurfaced in 2021 and 2022, reaching 15. 6 million tonnes and 16. 8 million tonnes, respectively.
Based on this upward trajectory, the first quarter of 2023 saw a further increase in imports compared to the same period in 2022. Specifically, there was an increase of 7. 7%, for a total of 3. 8 million tonnes equivalent. These figures suggest that despite the difficult situations posed by the pandemic, the metals import market remains dynamic and resilient.
It should be noted that although import volumes have increased, Indonesian statistics report a 22% reduction in the price of imports, from $4. 045 billion in 2022 to $3. 154 billion in the first quarter of 2023. This intriguing discrepancy between the volume and price of imports deserves further examination.
Conclusion:
Indonesia’s metallurgical industry is experiencing a dynamic landscape in 2023, marked by a 5% increase in demand for metals. This growth, which allows for a domestic metal production of 14. 4 million tonnes, coincides with a 14% increase in metal imports, driven mainly through corporations other than PT Krakatau Steel. The long-standing context of fluctuating import volumes, influenced by the COVID-19 pandemic, underscores the resilience of the sector. Although import volumes have increased, the discrepancy between volume and price warrants a closer look at the issues at stake in the Indonesian metals market.