Steel Import Surge Pressures Industry as Purbaya Moves to Review Illegal Inflows

JAKARTA, Investortrust.id — Finance Minister Purbaya Yudhi Sadewa promises on Monday, Dec 1, 2025 in Jakarta to review concerns about rising steel imports and alleged illegal inflows as Indonesia still depends on foreign suppliers for more than half of national demand, a move intended to understand the impact on domestic industry. He also invites sectoral associations to present evidence directly to his office to clarify discrepancies between industry complaints and internal customs reports.

Purbaya explained that he expected Kadin Chairman Anindya Bakrie to bring sectoral delegations for detailed consultations. “The Chairman promised to come to me bringing each sector one by one. So starting next week, each sector can come to me,” he noted.

Concerns escalated when Indonesia Society of Steel Construction Chairman Budi Harta Winata described a surge of imported steel that continued to undermine domestic producers. During the meeting, he told Purbaya, “We support Customs to arrest and stop these steel imports, sir.”

The impact had already reached the workforce, according to Budi. He stressed the severity of the situation, saying, “My employees originally numbered more than one thousand people and now it is around seventy people.”

In response, Purbaya extended an invitation for ISSC to present its evidence directly to the Ministry of Finance, remarking on a mismatch between industry claims and internal data. “When I ask my staff, the answer is always that things are good. When I ask Customs whether there are illegal imports, the answer is ‘there are none, sir,’” he added.

A broader restructuring of the customs agency was underway, Purbaya continued, warning of decisive consequences if improvements stalled. “If they do not improve within a year, I will replace them with SGS,” he stated.

Deputy Industry Minister Faisol Riza brought additional context before lawmakers by emphasizing Indonesia’s heavy reliance on imported steel. “The gap between steel consumption and national production is very large, and this gap is filled by imported products of around 55 percent of national demand and the majority from China,” he explained. “Meanwhile, our industry utilization is around fifty percent more or less.”

Faisol pointed out that domestic mills had remained focused mainly on construction and infrastructure, leaving higher value products neglected. As he put it, “This situation causes the development of steel products for other sectors that have high added value such as automotive, shipbuilding, heavy equipment and others to remain relatively limited.”

He further highlighted the technological lag in many local plants. “This condition affects quality and production costs and becomes a barrier in efforts to build a steel industry that is competitively sustainable and globally standardized,” he said.

Export performance told a contrasting story. Faisol detailed how shipments had reached 17.855 million tons through September 2025 while imports stood at 11.942 million tons. He said the resulting surplus of 5.943 million tons was supported by strong demand from China, Taiwan, India, Australia and Vietnam.

Ranking fourteenth globally in 2024 with 18 million tons of crude steel output, Indonesia still faced low capacity use at 52.7 percent. Faisol urged industry players to develop both domestic market penetration and export momentum, noting the opportunity to accelerate industrial upgrading.

A separate issue emerged from the rattan sector, raised by South Kalimantan Kadin Chair Shinta Laksmi Dewi, who described long-standing obstacles caused by the raw rattan export prohibition. “Raw rattan has been banned since President Jokowi’s administration, if I am not mistaken. We receive complaints from associations and also from rattan farmers,” she told the forum.

Purbaya acknowledged the concern and promised a formal reassessment with the Ministry of Trade. “Otherwise we will try to give input to the Ministry of Trade. We want what is good for South Kalimantan,” he remarked.

He concluded that all sectoral complaints would be addressed once Kadin submitted its comprehensive list, stressing the importance of aligning trade controls, industrial policy and domestic capacity building.