Jakarta, INTI - The Ministry of Industry acknowledged that Indonesia’s steel industry is beginning to show growth, but it remains overshadowed by a high dependency on imports, particularly from China. The dominance of imported products is considered a major challenge that limits the competitiveness of domestic producers.
Deputy Minister of Industry Faisol Riza revealed that the structure of Indonesia’s steel market is still dominated by the Asia-Pacific region. The five largest suppliers are China, with a value reaching US$16.11 million, followed by Taiwan, India, Australia, and Vietnam. On the other hand, Indonesia is recorded as one of the largest steel exporters in Southeast Asia, after Malaysia and Vietnam.
Data from BPS and the Ministry of Industry shows that steel import volumes peaked in 2022 at 17.9 million tons, but declined to 14.8 million tons in 2025. Meanwhile, national steel exports increased from 21.9 million tons in 2024 to 23.9 million tons in 2025.
Faisol noted that the total export value reached US$29.23 billion in 2024, with the export market structure dominated by the Asia-Pacific region.
“Where the five countries include China with the largest market of US$16.11 million, followed by Taiwan, India, Australia, and Vietnam,” he said during a meeting with Commission VI of the Indonesian House of Representatives in Central Jakarta on Wednesday, February 4, 2026.
Domestic Steel Demand Still Relies on Imports
However, domestic steel demand has not yet been fully met by local production.
“There is a significant gap between steel consumption and national production, and this gap is filled by imported products, most of which come from China,” said Faisol.
The Ministry of Industry has identified several fundamental issues. First, there is a large gap between national steel consumption and production, which is filled by imports. Second, the majority of domestic producers are still focused on the construction sector, while the needs of the automotive, shipbuilding, and heavy equipment sectors have not been fully addressed.
Other challenges include relatively old production facilities, outdated technology, and lack of environmental compliance, which lead to high production costs. This situation makes local products difficult to compete in terms of both price and quality.
“The pressure is further intensified by high energy and logistics costs, as well as very low import steel prices,” he said.
To support the industry, the government has prepared a set of integrated policies, including the implementation of trade remedies and import controls, mandatory Indonesian National Standards (SNI), strengthening the Domestic Component Level (TKDN), and ensuring energy supply through specific natural gas pricing schemes.
In addition, the government is promoting investment in upstream crude steel production, the adoption of environmentally friendly technologies, and downstream support to ensure that national steel is absorbed by the shipbuilding, automotive, military, and construction industries.
Conclusion
To support the industry, the government has prepared a set of integrated policies, including the implementation of trade remedies and import controls, mandatory Indonesian National Standards (SNI), strengthening the Domestic Component Level (TKDN), and ensuring energy supply through specific natural gas pricing schemes.
In addition, the government is promoting investment in upstream crude steel production, the adoption of environmentally friendly technologies, and downstream support to ensure that national steel is absorbed by the shipbuilding, automotive, military, and construction industries.
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