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Indonesia: Steel industry sees drop in demand due to COVID-19

Indonesian steelmakers are facing severe impacts caused by the COVID-19 pandemic on their business with the demand having decreased by 90 percent from the normal times.
Indonesia: Steel industry sees drop in demand due to COVID-19 ảnh 1A machine operates at a steel factory of JFE Steel Galvanizing Indonesia in Cikarang in Bekasi, West Java. (Photo: https://www.thejakartapost.com/)

Jakarta (VNA) - Indonesian steelmakers are facing severe impacts caused by the COVID-19pandemic on their business with the demand having decreased by 90 percent from the normal times.

The low demandis partially due to the large-scale social restrictions (PSBB) imposed by thegovernment to contain the disease outbreak, which has led to the closure ofbusinesses, including major steel-consuming businesses in the automotive andconstruction industries.

Speaking at a conferenceon May 20, Tedja Sukmana Hudianto, vice president of the PT Steel PipeIndustry of Indonesia (Spindo) said the drop is verypronounced at the retail front, noting that there’s a decrease inpeople’s purchasing power and businesses are holding off purchasing plans.

The steel industry isone of the country’s strategic upstream industries, as it provides rawmaterials for infrastructure, manufacturing, transportation and defense, amongother sectors.

South East Asia Ironand Steel Institute (SEAISI) data show that steel consumption in Indonesia rose11 percent to 15.1 million tonnes in 2018. However, the demand is largelyserved by imports from China and other countries.

According to Statistics Indonesia (BPS), the country’s imports of iron andsteel, accounting for 6.26 percent of Indonesia’s total non-oil and gasimports, dropped 23 percent year-on-year from January to March at 2.12 billionUSD./.
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