The Indonesian Government will simplify the rules on imports of scrap metal for use as raw material by the country's steel industry, expecting that this will lead to a reduction in imports of steel billets, said the industry minister.
The Indonesian Iron & Steel Association has complained for years that steel imports, especially from China, have affected their business despite the anti-dumping duties levied on many types of steel products from China and other countries.
Minister Agus Gumiwang Kartasasmita said that the local steel industry is currently using only about 40 percent of its capacity, partially because companies do not have enough raw materials for manufacturing. If the country's mills are able to increase their utilization levels, they will meet 70 percent of domestic demand for steel products.
Kartasasmita said, "We've decided for scrap metal, we will relax their imports ... because we can see the need for scrap metal in the domestic market. This will support the production of billets.”
Scrap metal is currently on the government's list of dangerous and toxic waste. Importers of such waste must be approved and must receive various licenses from the ministries of industry the environment and trade.
The new government policy would exclude scrap metal from the list, the Minister said, potentially reducing the number of permits required for shipments. Kartasasmita predicts that Indonesia would import 5 million tons of scrap metal after relaxation, but did not say when the new rules will come into force.
Rising imports of steel products have hit state-controlled steel maker Krakatau Steel , who last year laid off thousands of workers amid a restructuring process.