The Phenomenon Of Indonesia Importing 6.5 Million Tons Of Steel In Semester I 2021, This Is What The Research Institute Says

Illustration. (Photo: Doc. Antara)

JAKARTA - The Institute's Research-Oriented Development Analysis (RODA) has asked the government and producers to pay close attention to the increase in steel imports, which reached 6.5 million tons in the first semester of 2021, an increase of 12.7 percent compared to the same period last year.

"This phenomenon needs to be used as an evaluation material from both the government as a policymaker and the industry as business actors", said Executive Director of RODA Institut Ahmad Rijal Ilyas in his statement, quoted from Antara, Tuesday, September 14.

According to data from the Central Statistics Agency (BPS), steel imports in the first semester of 2021 amounted to 6.5 million tons, while the same period last year was only recorded at 5.8 million tons. The value of steel imports also increased by 5.3 billion US dollars or 51.6 percent compared to last year's 3.5 billion US dollars.

Ahmad explained that the increase in imports in value was mainly due to the significant increase in world steel prices that occurred from mid-2020 until now.

According to him, there are many aspects that will lead to an increase in steel imports in the first half of 2021. The increase in demand for steel derivative products as a result of the economic recovery is a critical determining factor.

Various government and private sector projects that were delayed last year have now restarted.

The government provides stimulus to several sectors to increase competitiveness, including relaxation of Sales Tax on Luxury Goods (PPnBM) for the automotive sector to facilities for natural gas prices for certain industries, including the base metal industry.

"The phenomenon of the increase in imports does not escape imports carried out by the producers themselves. Field information notes that 52.8 percent of imports are carried out by members of the steel producer association (IISIA)", said Ahmad.

He further explained that this fact needs to be investigated considering that several producers import similar goods from their production, either through producer entities or subsidiaries. In fact, he continued, there are import facilities carried out by producers who have priority line import facilities to facilitate the flow of production raw materials.

He said that as much as 50.6 percent of steel imports were carried out by producers who have these facilities. On the other hand, the increase in imports of iron and steel was also accompanied by a significant increase in exports, so that the trade balance for intermediate steel products located at Post HS 7208-7229 was a surplus of 1.7 billion US dollars.

If added by the trade balance of steel derivative products which was at HS 73, the balance experienced a surplus of 2.7 billion US dollars, an increase of more than 1.500 percent compared to the same period last year of 177.000 US dollars.

"The government's import control policy targets the balance of national steel supply and demand, but the policy is highly dependent on the availability of data used as analysis material", said Ahmad.