PT Krakatau Steel, Indonesia’s state-owned steel producer, sold 607,130 tons of steel products in the first quarter of this year, a 24.27% increase from the same period in 2017 at 488,558 tons, the company said in a quarterly report posted on its website.
The company’s selling price of all steel products also gained between 7.86% – 30.3% in the same period, compared to prices in the first quarter 2017. It sold Hot-rolled coil at an average price of $658 per ton, rising 16.17% from the first quarter 2017. The prices of its Cold-rolled coil climbed 7.86% to an average of $703/ton in the first three months of this year, from the same period last year.
In the first three months of this year, its HRC sales surged 42.79% to 328,879 tons, from 230,324 tons in the first quarter of 2017. In the same period, sales of CRC increased 5.85% to 160,449 tons, from 151,585 tons a year ago.
The company, which is based in Cilegon in West Java, sold 86,314 tons of long product, a 7.79% from 80,079 tons in the same period in 2017. Sales volume of pipes, both spiral and ERW, surged 18.51% to 31,488 tons, from 26,570 tons in the first quarter of 2017.
Activity updates
PT Krakatau Steel signed a Memorandum of Understanding on Feb. 21, 2018, with PT Wijaya Karya Industri & Konstruksi, to supply Hot Rolled Plate for PT Wijaya Karya’s projects in several cities, such as bridges and fly over. Wijaya Karya Industri is a subsidiary of state-owned construction firm, PT Wijaya Karya.
Krakatau Steel’s President Director Mas Wigrantoro Roes Setiyadi has said the company will be pushing for a long-term supply deal with other Indonesia’s state-owned firms to boost its sales.
Up to March 2018, Krakatau Steel has delivered 57,000 tons of steel products to its consortium partner for the construction of the Jakarta-Cikampek II (Japek II) elevated toll road since the project started in May 2017. The company has committed to deliver 200,000 tons of steel products for the project.
As for upgrading its steel plant, as o March 31 March, construction of its Hot Strip Mill #2 (HSM#2) has reached 66,60%. HSM#2 project will increase its production capacity of its Hot Rolled Steel by 1,5 million tons per year.
Outlook
Quoting World Steel Dynamics, WSD expects the HR export price will be rallying $50-100 per ton, while the current average export price, excluding the Chinese price, is about $640 per ton. By this October WSD expects export prices will decrease to $525 as shortages is expected to ease and current high prices may cause overproduction. Also, buyers will decide to wait and not to place orders as they fear prices may decline in the near-term.
Indonesia’s domestic steel prices fluctuated in line with fluctuations in global steel prices. Steel prices rally began to Q1 2018. The uptrend resumed in late September following the uptrend in Chinese steel prices.
The country’s domestic steel price i expected to decline, starting in the middle of 2Q.
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