RI'S STEEL PRODUCTION DOWN 50 PERCENT : MINISTER

Jakarta, Nov 13 (ANTARA) - Indonesia's steel industry has cut output by up to 50 percent to minimize losses because of low export demand and commodity prices, a minister said.
"They produced steel while the prices of raw materials were high and therefore their products cannot compete at the current prices. So now they seem to have cut production," Industry Minister Fahmi Idris said after a seminar on investment prospects here on Thursday.
He said if steel production was not cut it would threaten the price of stocks produced while the prices of raw materials were high in the middle of this year.
"So what they had to do was cutting production. I do not know by how much but they will do it until their stocks have been sold," he said.
The director general of metal, machinery, textile and multifarious industries, Anshari Bukhari, said the drop in the price of steel was caused by low domestic and export demand following postponment of investment projects as a result of tight liquity.
It also happened probably because of the entry of cheaper imported products, he said.
Therefore, he said, national steel makers had cut production by up to 50 percent of their capacity.
"On the average, steel makers have reduced output by more than 50 percent. This is extraordinary," he said.
The prices of steel products had dropped 40 to 50 percent from their level in July. Citing examples, he said the price of steel scrap had dropped from Rp7,000 per kilogram to Rp2,500 per kilogram now and the price of hot rolled coil from US$2,000 to US$1,700 per ton.
Indonesia produces up to 4.6 million tons of steel per year while its domestic demand stands at 6.5 million tons per year.