Posted on 16 Nov 2022
Indonesian steel consumption growth will remain positive, underpinned by the construction and automotive sectors, says Indonesian Iron and Steel Industry Association (IISIA) director Bimakarsa Wijaya.
Wijaya told Kallanish on the sidelines of the Southeast Asia Iron and Steel Institute (SEAISI)’s Steel Mega Event & Expo in Subang Jaya on Tuesday that he expects steel consumption in Indonesia to reach 19.3 million tonnes this year, from 15.9mt in 2021.
Other than the positive growth in the construction sector, the automotive industry, which is targeting production of 1 million cars this year, will support steel demand.
Wijaya also expects steel consumption to continue to register growth of 3% to 5% in 2023, driven by the government's New Capital City (IKN) development project.
The manufacturing industry outlook is however challenging next year and car production is not anticipated to grow further, Wijaya said.
However, construction will have some advantages, supported by IKN. The new city will boost the economy and construction sector in the near future, and spur steel demand. Construction will start from 2023 and it will be ready for occupancy in 2024. It is estimated about 9mt of steel are required for the first and second stages.
The potential next stages of development comprise an area of 199,000 hectares, which will be highly anticipated, he observed.
The construction sector is estimated to comprise approximately 78% of national steel consumption, and 85% of this is consumed in Java alone.
Wijaya said this should gradually shift in the near future, driven by IKN and other projects outside Java.
The use of steel in construction is also expected to grow in the near future, gradually substituting conventional concrete construction.
Source:Kallanish
