Indonesian steel companies suffer overstock

Indonesian steel companies suffer overstock of 2 mln tons. The Indonesian domestic iron and steel companies are suffering an overstock by 50 percent of the country's 4-million-ton production due to rampant import amid the global financial crisis. "The situation leads to an overstock in domestic industry by 2 million tons while new projects in the country only boosted the domestic demands for concrete iron, not steel components," the Chairman of Indonesian Iron and Steel Industry Association (IISIA) for Engineering and Fabricators Djamaluddin Tanoto told Xinhua on Monday. According to Tanoto, steel components are applied to building factories and producing engine equipment. However, he said that even giant state-owned enterprises such as PLN (state owned power company) mostly imported engine equipment. The Indonesian government has introduced a new trade regulation on the importation of steel commodities to protect the domestic steel industry. The regulation, which will be effective on April 1,2009, will require steel importers to process certification and file a report to an appointed surveyor on their steel commodity needs before importing.