The metal, iron and steel industries expect costs to fall and demand to level up next year, helping manufacturers to avoid continued contraction triggered by the 2008 global economic crisis.

Given extremely poor sales conditions and sky rocketing production
costs, the extent of the contraction reached 7.19 percent year-on-year
in the third quarter of this year. But there is likely to be a turn for
the better next year.

The industry ministry said it expects up to 2.75 percent growth in sales by the end of 2010.

“We expect conditions will get back to normal in 2010, with more
balanced costs and production structures,” said Ansari Buchari, the
ministry’s director general for metal, machinery, textile and
miscellaneous industries.

Improvement in global market conditions, Ansari said, would help the
basic metal, iron and steel industries to grow beyond 2 percent next
year even though producers spent only limited amounts on new investment
this year.

Ansari said investment made this year was mostly by smaller companies
with a production capacity of about 100,000 tons a year, while the
bigger players were more cautious over the poor market conditions.

Investment by the big players, he said, would soon start with the
signing of an agreement next week between state-owned steelmaker PT
Krakatau Steel and South Korean steelmaker Pohang Iron and Steel
Company (Posco) to build a new US$5 billion steel factory in Cilegon,
Banten.

The factory is expected to produce 2.5 million tons of steel slabs and
steel billets pear year in the first phase of operations.

Indonesian Iron and Steel Industry Association (IISIA) executive
director Hidajat Triseputro said the slump in global demand had forced
many manufacturers to run on as little as 30 percent to 40 percent of
their production capacity.

“Our utilized capacity has been only 30 percent to 40 percent since the
third quarter of last year, in contrast to 70 percent of utilized
capacity in the second quarter of 2008,” he told The Jakarta Post.

Hidajat said apart from enjoying a positive trend towards favorable
global market conditions, steel producers were also hoping to benefit
from the government’s increased support for infrastructure projects
starting next year.

“That is where our hope lies. With infrastructure projects running,
there will be many steel manufacturers *positively affected*.
Infrastructure and toll roads need steel,” Hidajat said.

However, he also warned of a possible rush of steel imports next year,
when a free trade agreement between Association of Southeast Asian
Nations (ASEAN) and China begins to come into effect, which will
include steel (among other products).

He said the association was gathering information after recent indications of increases in steel imports.

The Central Statistics Agency (BPS) recorded that imports of iron and
steel increased from US$279.6 million in July to $364.5 million in
August and $434.1 million in September; and imports of iron and steel
products stood at $237.5 million in July, $239.3 million in August and
$184.4 million in September.

However, between January and September, overall imports of iron and
steel declined from $6.6 billion last year to $2.7 billion this year
and imports of iron and steel products declined from $2.4 billion last
year to $2.1 billion this year, the BPS says.

Source: The Jakarta Post

Search to find what you want

• Taiwan iron and steel exports down 32.5 percent in 2009

    According to the figures released by the Taiwan Ministry of Finance, in 2009 Taiwan’s iron and steel exports came to a value of $12.32 billion, down 32.5 percent, while its metal product exports totaled $7.03 billion, decreasing by 29.5 percent, both compared to 2008. In the January-November period of 2009,

• CISA see: Domestic steel market, a better performance in 2010

    Luo Bingsheng, the executive vice chairman of the China Iron&Steel Association (CISA), has predicted that the steel market in China will indicate a better performance in 2010. Mr.

• Ansteel constructed of iron, steel output in each case more than 20 million t

    Iron and steel output at Anshan Iron and Steel Group, China’s No.2 steelmaker and largest iron ore miner, for the first time exceeded 20 million tonnes for both pprducts in 2009, the State-owned Assets Supervision and Administration Commission said. The statement on its website did not clarify whether it was

• China MiIT supported CISA and CCCMC in negotiations with foreign companies

    Zhu Hongren, spokesman for China’s Ministry for Industry and Information Technology (MIIT) has made a statement against the background of the iron ore contract price talks for 2010.

• Anben Karara iron ore project approved, and probably kick-off in Q4

    The Karara Iron Ore Project jointly operated by the Australian iron ore company Gindalbie and the Chinese Anben Iron and Steel Group has been approved by Australia’s relevant authorities, enabling the project to kick off in the fourth quarter. Gindalbie made the announcement this week, saying the approval marks a

• Anben Karara iron ore project approved, and probably kick-off in Q4

    The Karara Iron Ore Project jointly operated by the Australian iron ore company Gindalbie and the Chinese Anben Iron and Steel Group has been approved by Australia’s relevant authorities, enabling the project to kick off in the fourth quarter. Gindalbie made the announcement this week, saying the approval marks a

• Taiwan steel companies to buy stake in Brazil miner

    Taiwan’s China Steel said Friday it will spend 95 million US dollars on a stake in Brazil’s Namisa SA, its first investment in a foreign iron ore miner. The island’s largest steel producer made the decision in a bid to secure overseas supply amid expectations that a global recovery will

• Nanjing Steel plan to increase the capacity

    China Securities Journal reported that Nanjing Iron & Steel Co Ltd plans to forge annual capacity of 6.5 million tonnes of steel and 6.15 million tonnes of steel products after full listing of steel assets of Nanjing Iron & Steel United Co Ltd through assets reorganization. According to the report,

• July steel shipments up 9.9 percent from June

    The American Iron and Steel Institute (AISI) reported that for the month of July 2009, U.S. steel mills shipped 5,271,000 net tons, a 9.9 percent increase from the 4,797,000 net tons shipped in the previous month, June 2009, and a 42.5 percent decrease from the 9,175,000 net tons shipped in

• July steel shipments up 9.9 percent from June

    The American Iron and Steel Institute (AISI) reported that for the month of July 2009, U.S. steel mills shipped 5,271,000 net tons, a 9.9 percent increase from the 4,797,000 net tons shipped in the previous month, June 2009, and a 42.5 percent decrease from the 9,175,000 net tons shipped in

• Maanshan Steel Says Chinese prices are at breakeven levels

    Maanshan Iron & Steel Co., the second-biggest Hong Kong listed Chinese steelmaker, said prices in China are trading around breakeven levels. “At present, the steel prices are around the breakeven levels,” Chairman Gu Jian Guo said today in an interview in Beijing. “We’re having a small profit margin.

• Hbis is China s largest listed steel group

    Recently, it is learned from the annual meeting of Hebei Iron and Steel Group, Hebei Iron and Steel Co., Ltd. started to operate on January 1, 2010, becoming China’s largest listed steel company

• USA: October steel shipments up 5.3 percent from September

    The American Iron and Steel Institute (AISI) reported today that for the month of October 2009, U.S. steel mills shipped 6,097,000 net tons, a 5.3 percent increase from the 5,793,000 net tons shipped in the previous month, September 2009, and a 13.4 percent decrease from the 7,041,000 net tons shipped

• Wuhan Iron and Steel receives 80-billion. RMB line of credit from CDB

    Wuhan Iron & Steel (Group) Corp, the parent of Shanghai-listed Wuhan Iron and Steel Co Ltd , yesterday signed a financial cooperation agreement with China Development Bank, a state-controlled bank primarily responsible for raising funds for large infrastructure projects in China. According to the agreement, CDB will provide RMB 80

• China fluctuations in iron ore imports tariff triggers concerns

    The sharp fluctuations in China’s monthly iron ore imports may be a result of speculative activities, according to a Customs official. According to the latest Customs statistics, October’s iron ore imports dropped almost 30 percent on month to 45.47 million metric tons (tonnes), but the iron ore imports increased nearly