Govt delays import restriction on alloy steel with boron content

The Ministry of Trade has decided to delay for a month the implementation of Ministry Regulation No 28/2014, which aims to tighten the importation of alloy steel with boron content, Bisnis Indonesia reported on Wednesday.

The paper quoted Director General of International Trade at the ministry Bachrul Chairi as saying that the delay was made following protest from Indonesian Importers Association GINSI, which earlier demanded for a three-month delay.

The ministry issued the policy, supposedly to become effective in July, in a bid to help protect local steel industry, which has been hurt by the recent surge in the import of alloy steel containing boron.

Under the new regulation, boron-added alloy steel importers should secure recommendations from the Industry Ministry to obtain import permits from the Trade Ministry, which will be effective for two years.

Importers will be divided into two types ? producer importers, who need the material for their production, and registered importers, who generally resell the commodity to other parties.

Imports of alloy steel with a boron content started to rise sharply in 2009. The increase coincided with a sharp decline in imports of non-alloy steel. Officially, imports of non-alloy steel, such as rolled coil and cold rolled coil, tumbled by 44 percent in 2010, 40 percent in 2011 and 25 percent in 2012.

However, the ministry suspected non-alloy steel was imported under the category of alloy steel, shipments of which from China, Japan and Taiwan rose steeply in the same period.

A very small content of boron in alloy steel enables importers to place it in the category of alloy steel to enjoy lower import duties, or avoid punitive duties, comprising anti-dumping duties and safeguard duties imposed by Indonesia.

Major steel makers including Krakatau Steel and Gunung Garuda are expected to benefit from the new rule. (*)