The government of Indonesia plans to introduce a 15 percent anti-dumping duty on steel to prevent massive steel imports thus supporting Indonesia’s domestic steel industry. Indonesia is not the first country to introduce anti-dumping import duties on steel products. China imposed anti-dumping duties on certain stainless steel tubes from Japan and the European Union (thereby increasing the global steel oversupply), while Malaysia imposed anti-dumping duties on hot rolled coils imported from China and Indonesia.
Indonesian Coordinating Minister for the Economy Sofyan Djalil said that Indonesia’s new anti-dumping import duties (to be implemented at the end of March 2015) will protect the business of domestic steel manufacturers such as state-controlled Krakatau Steel and Posco. However, the plan still needs further discussion among the Fiscal Policy Office (Badan Kebijakan Fiskal), Finance Ministry, Trade Ministry and Industry Ministry.
Irvan Kamal Hakim, President Director of Krakatau Steel and who also chairs the Indonesian Iron and Steel Industry Association (IISIA), said that falling global steel prices has led to protectionist measures taken by several countries in an attempt to support their domestic steel making industries. Therefore, Hakim previously already requested the Indonesian government to introduce anti-dumping import duties on steel products amid declining steel prices and the influx of steel imports (Batam, a shipbuilding hub, in particular requires a large supply of steel).
Between 2011 and 2014, the global steel price declined from an average USD $705 per ton to USD $536 per ton due to the steel oversupply in China. In the first quarter of 2015, the steel price continued to shrink to USD $442 per ton. Meanwhile, Indonesia imported 8.2 million tons of steel in 2013, up sharply from 3.4 million tons in 2009. Indonesia requires to import steel as domestic steel production capacity stands at an annual seven million tons only. Moreover, steel imports into Indonesia were basically also supported by the country’s low import duties on steel (at five percent only), whereas Malaysia set a 20 percent import duty on steel imports plus the anti-dumping import duty of 24 percent for steel imports from Indonesia.
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