The Steel Industry Moves, Steel Price 2018 Continues Improving

INDUSTRY.co.id - Jakarta - The management of PT Krakatau Steel (Persero) Tbk estimates that the price of steel industry will continue in 2018, especially for Hot Rolled Coil (HRC) in the range of 468 to 700 US dollars per ton.

"The improvement in international steel prices has a positive effect on the company's financial performance in 2017. It is estimated that such conditions will continue in 2018," said President Director of PT Krakatau Steel Tbk, Mas Wigrantoro Roes Setiyadi in Cilegon, Banten, Tuesday 20/3/2018).

According to Mas Wigrantoro, the Chinese government's policy as the world's largest steel producer to reduce its environmentally insecure plant has made world steel prices that have fallen back to normal, even increasing.

Learning from experience in previous years, Mas Wigrantoro has asked the government to remain cautious and monitor unfair trade practices on Chinese steel products in the future.

On the other hand, it is necessary to multiply long term supply agreement (LTSA) so as not to be vulnerable if at any time price change occurs, said Mas Wigrantoro.

Further Director of Marketing of PT Krakatau Steel, Purwono Widodo added that the imposition of import duty on steel and aluminum by the US is feared will make China throw its steel products, especially steel alloy to Asia including Indonesia.

"Such conditions will make the Chinese-origin alloy steel that is not subject to import duties will flood the Indonesian market, this unfair practice that should be anticipated," he said.

Purwono hopes the government can provide protection by enforcing regulations related to increased use of domestic production (P3DN) and component level in the country (TKDN).

Meanwhile, Finance Director of PT Krakatau Steel, Tambok P. Setyawati S, as quoted by Antara, said that with rising steel prices, the company's revenue increased 7.76 percent in 2017 to 1.5 billion US dollars, resulting in a 10-fold increase in operating profits more than 50.74 million US dollars from the previous year 4.4 million US dollars.

Such conditions make the company's net loss continue to improve if in 2015 is still 320 million US dollars, in 2016 171 million US dollars, then in 2017 live 81.7 million US dollars, we are optimistic in 2018 financial performance improves with increasing steel prices and efficiency that the company runs, explains Tambok.

Wigrantoro added the physical progress of the development of hot strip mill 2 has reached 58 percent more by the end of February 2018, with the operation of this plant scheduled for 2019 will increase the production capacity of HRC 1.5 million tons per year.

With the completion of this plant will also make PT Krakatau Steel can increase the production capacity of HRC in addition to saving the use of raw materials up to 50 US dollars per ton.

Related to business development, Mas Wigrantoro also convey the plan of IPO of PT Krakatau Bandar Samudra, expansion plan of Krakatau Medika Hospital, and expansion of Hotel Royal Krakatau, and Cipasauran pipeline completion stage which is expected to increase capacity of PT Krakatau Tirta Industri in supplying clean water requirement of 600 liter per second.