Indonesia Steel Industry Report - 2015

Indonesia Steel Industry Report - 2015

This report profiles Indonesia’s steel industry, discussing market trends and outlook through 2014 and into 2015 and beyond. The report also highlights key leading players in the sector including PT Krakatau Steel, PT Bakrie and Brothers, PT Gunawan Dianjaya Steel, and PT Jaya Pari Steel.

Despite the fact that Indonesia is the third top steel consuming country in ASEAN with a share of 20%, its steel demand showed a marginal growth rate of 1.6% in 2014 in line with lower economic growth. Moreover, the increase in steel consumption was met by imported products as local producers supply only about half of the country’s steel demand. The largest country of origin for imports is China, which faces a chronic oversupply.

Total import of iron and steel products increased marginally by 0.9% to 12.9mn tonnes in 2014. Imports of slab, hot-rolled coil/plate (HRC), wire rods and bars command the largest share. Nevertheless, imports of HRC declined, while exports surged in line with the increase in domestic production as new steel plants come on-stream. Total export volume of iron and steel products climbed to 1.76mn tonnes.

For 2015 and beyond, national steel demand is expected to continue rising, supported by growth in the construction and infrastructure sectors. However, the industry faces several challenges; among them include the intense competition from cheap Chinese imports, continuously declining steel prices and further weakening of the Rupiah. These current market conditions hamper the profitability and margins of domestic steel producers, and hence remain a major area of concern.

Key Points:

Domestic steel consumption increased slightly by 1.6% in 2014, but local producers only managed to supply about 50% of the domestic consumption.

Domestic steel production increased by 27% y/y in 2014, mainly due to higher hot-rolled plate production. Bars, plates and wire rods account for the largest annual production output of the industry.

Capacity utilisation rate of crude steel improved in 2014; however some products still saw decreases in the production utilisation. Capacity utilisation is expected to pick-up in the coming years amid investments in new steel mills production and efficiency.

It is expected that the construction sector will be the primary driver of demand for the domestic steel industry, although the biggest obstacle restricting demand is the declining steel prices and higher electricity and exchange rate costs.

1. Industry Profile
1.1 Global overview
1.2 ASEAN overview
1.3 Country overview
1.3.1 Steel market situation
1.3.2 Consumption
1.3.3 Production
1.4 Industry performance
1.5 Capacity utilisation
1.6 Steel scrap

2. Market Trends and Outlook
2.1 Imports and exports
2.2 Indonesian National Standard (SNI)
2.3 Policy and regulations
2.3.1 Anti-dumping
2.3.2 Safeguards
2.3.3 Tariffs
2.4 Raw material and steel prices
2.5 Impact of China
2.6 Investment
2.7 Market outlook

3. Leading Players and Comparative Matrix
3.1 Leading Players
3.1.1 PT Krakatau Steel (Persero) Tbk (KRAS)
3.1.2 PT Bakrie and Brothers Tbk (BNBR)
3.1.3 PT Gunawan Dianjaya Steel Tbk (GDST)
3.1.4 PT Jaya Pari Steel Tbk (JPRS)
3.2 Comparative matrix
3.3 SWOT analysis

4. Tables and charts
Table 1: Global apparent steel use (ASU) for finished steel products (2014–2016)
Table 2: Top 10 apparent steel using countries (2014-2016)
Table 3: Global crude steel production (mn tonnes) (2010–9M2015)
Table 4: Top 10 steel producing countries (mn tonnes) (9M2015)
Table 5: ASEAN apparent steel consumption (metric tonnes) (2014 vs. 2013)
Table 6: Indonesia apparent steel consumption of total steel products (metric
tonnes) (2010–2014)
Table 7: Indonesia apparent steel consumption by finished steel products (metric
Table 8: Total production of hot-rolled steel products (metric tonnes)
(2013 vs. 2014)
Table 9: Total production of finished steel products (metric tonnes) (2010–2014)
Table 10: Total production of crude steel products (metric tonnes) (2013 vs. 2014)
Table 11: Growth and contribution of the basic metals industry (%) (2011-2014)
Table 12: Scrap demand and supply (metric tonnes) (2013 vs. 2014)
Table 13: Indonesia imports of iron and steel products (metric tonnes) (2010–2014)
Table 14: Imports of hot-rolled steel products and semi-finished products (tonnes)
(2013 vs. 2014)
Table 15: Indonesia exports of iron and steel products (metric tonnes) (2010–2014)
Table 16: Exports of hot-rolled; pipes & tubes and semi-finished products (tonnes)
(2013 vs. 2014)
Table 17: Indonesia’s import tariff rates for major steel products
Table 18: Several ongoing capacity expansion projects of Indonesian steel
Table 19: Indonesia’s proportion of urbanised population (2014 vs. 2030)
Table 20: Krakatau Steel operational highlights (9M2015 vs. 9M2014)
Table 21: Krakatau Steel financial highlights (2010–9M2015)
Table 22: Bakrie & Brothers financial highlights (2010–9M2015)
Table 23: Gunawan Dianjaya Steel financial highlights (2010–9M2015)
Table 24: Jaya Pari Steel financial highlights (2010–9M2015)
Table 25: Leading players’ comparison of key financial ratios

Chart 1: Top 10 steel producing companies in 2014
Chart 2: ASEAN production, import, export and consumption (2008-2014)
Chart 3: Indonesia steel production and consumption (2004-2014)
Chart 4: Indonesia import and export of total iron & steel products (2004-2014)
Chart 5: Steel consumption by industries
Chart 6: Hot-rolled steel production (2009-2014)
Chart 7: Crude steel production (2009-2014)
Chart 8: GDP of iron & basic steel industry (current price) (Mar 2010-Dec 2014)
Chart 9: Crude steel capacity utilisation rate (2004-2014)
Chart 10: Quarterly import & export value of iron and steel (Q1/2012-Q2/2015)
Chart 11: Global iron ore production (2004-2014)
Chart 12: Iron ore monthly price trend (Oct 2010-Oct 2015)
Chart 13: China crude steel capacity vs. supply vs. demand (2008-2014)
Chart 14: Indonesia steel consumption trend (2001-2015)

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