Indonesia will ease rules on scrap metal imports

The Indonesian government will ease rules on the import of scrap metal for use as raw material by the country’s steel industry, hoping this will lead to a reduction in imports of steel billets, the industry minister Agus Gumiwang Kartasasmita said Feb. 12.

The Indonesian Iron and Steel Association has long complained that steel imports, particularly from China, have hurt their business, despite anti-dumping duties applied on many types of steel products from China and other countries. Kartasasmita said the local steel industry is now utilizing only about 40 percent of its capacity, partly because companies don’t have enough materials for production.

If the country’s mills can increase their utilization rates, they can supply 70 percent of domestic steel product demand, he said.

“We’ve decided for scrap metal, we will relax their imports ... because we can see the need for scrap metal in the domestic market,” said Kartasasmita. “This will support the production of billets.”

Scrap metal is currently included in the government’s list of dangerous and poisonous waste. Importers of such material must have a license and must obtain numerous permits from the ministries of industry, environment and trade.

Kartasasmita estimated Indonesia will import 5 million tons of scrap metal after the relaxation, but he did not say when the new rules would take effect.