Indonesia’s steel industry grew by 152%, from IDR 94.6 trillion in 2020 to IDR 238.4 trillion in 2024. Steel is one of eleven national priority commodities in the government’s strategic downstreaming agenda, viewed not only as a construction material but also as a foundation of industrialization. President Prabowo Subianto targets 8% annual economic growth for 2025–2029, requiring IDR 13,032 trillion in investment, with 86.6% expected from the private sector. BKPM projects the basic metal sector, especially steel, will be a key driver, with national consumption forecasted to reach 100 million tons annually by 2045. The 2023–2029 steel roadmap sets production targets from upstream (billets, slabs) to downstream (plates, HRC, pipes, wire mesh), with early results exceeding expectations: steel plate at 312.8%, slab 215%, and HRC 391% of target. However, downstream products like coated steel and wire mesh still require further investment.
To encourage investment, the government introduced a “positive fictitious” licensing rule under Law No. 6/2023 and PP 5/2021, meaning permits are legally approved if not processed within a set timeframe. BKPM now oversees permits for 16 priority sectors through the risk-based OSS system. Incentives include tax holidays, tax allowances, and raw material masterlists. The development of 25 Special Economic Zones and over 160 industrial parks supports investment expansion beyond Java. Despite rising capacity, the steel trade balance remains in deficit, with IDR 48.3 trillion in exports and IDR 148.5 trillion in imports in 2023, signaling the need for greater absorption by sectors such as automotive, maritime, and defense.
