Posted on 23 May 2025
Indonesia’s PT Ispat Indo has shut down its wire rod production plant primarily due to rising pressure from low-cost Chinese imports and tight margins, industry sources tell Kallanish.
The company operated two wire rod mills with a combined capacity of 600,000 tonnes/year, as part of its total production capacity of 700,000–800,000 t/y. The facility, based on electric arc furnace technology, mainly produced wire rods, billets, and bars.
For wire rod, the company produced high-carbon, low-carbon, and high-tensile variants in various grades such as SAE 1008, Q195, and mesh-grade.
In 2024, the company’s output dropped by around 40% amid weak market demand and operational underutilisation.
PT Ispat Indo’s steelmaking relied on 65% scrap and 35% DRI or pig iron, with about 70% of its sales within Indonesia and 30% exported.
“In line with country’s aim to cut down on emissions, the percentage usage of scrap and DRI kept changing, and raw materials got costlier. Many a time our raw material and finished steel had a difference of about $10 to $20/t…additionally cheaper imports from China has acted as the final blow,” a company insider notes, speaking on condition of anonymity.
The closure also reflects growing challenges for older plants in Indonesia, as the government pushes for cleaner steel production, including compliance with E20 fuel standards and long-term decarbonisation goals.
While no official statement has been issued, the company is reportedly considering asset sales. Speculation suggests that potential buyers could include local steelmakers like Krakatau Steel or Gunung Raja Paksi, as well as foreign investors eyeing Indonesia’s infrastructure-led growth. However, none of these prospects have been confirmed. The facility may also be upgraded for low-emission steel production, leveraging its existing electric arc furnace (EAF) setup.
Source:Kallanish
