Indonesia steel demand to surge due to auto production, says Posco

Image: www.tatasteeleurope.com

Indonesia’s growing automotive sector will see the country’s need for steel increase sharply in the coming years, according to research from Posco.

The Jakarta Post reports an Indonesian-based researcher from Posco – South Korea’s main steel maker – as predicting the growth in the automotive industry will increase from 1.1 million vehicles in 2015 to 2.4 million in 2025.

An unusually large proportion of these vehicles would be multi-purpose, meaning demand for steel would be especially high.

“Since multi-purpose vehicles account for more than 61 percent of the car sales in Indonesia, compared to 31 percent in China and 28 percent in South Korea, Indonesian demand for automotive steel will grow much faster than many other countries,” Posco’s Choi Bu-Sik told The Jakarta Post.

According to Choi, auto steel needs were up from 2.1 million tons in 2014 to 3.1 million tons in 2015, with Japan providing 46 per cent of the steel, South Korea 35 per cent and others 20 per cent.

An increasing number of Japanese car makers are looking to set up a second regional base, after Thailand, in Indonesia. It is in the three major ASEAN nations for production, along with Thailand and Malaysia, by sales and production.

Indonesia’s GDP grew at 4.8 per cent in 2015. It has the world’s 18th largest economy and fourth-largest population.

Leave a Reply