Indonesia-based steelmaker PT Krakatau Steel (Persero) Tbk (PT KS) has announced that it is building a new blast furnace with an annual
production capacity of 1.2 million mt which is scheduled to go into operation in the second half of this year. The company expects the new blast furnace to help reduce costs by $60-80/mt. Within the scope of its expansion program, Krakatau Steel is building a 1.5 million mt hot strip mill which will bring the steelmaker's total hot rolled strip capacity to 3.9 million mt per year.
According to its financial results, the company registered an operating loss of $70.4 million in 2014 due to lower average selling prices and sales volumes. The company's sales revenue decreased by 8.1 percent year on year to $161 million, with sales volume amounting to 2.31 million mt, down 2.5 percent compared to the previous year.
According to Krakatau Steel, in
Indonesia, although domestic steel demand is likely to increase, prices remain stagnant, in line with the national economic slowdown. The main segment of the steel market, namely, automotive, ship manufacturers and construction, will only see slight growth. Krakatau Steel president Irvan K Hakim said that, due to China's economic slowdown and the depressed economy in the Russian market, oversupply still prevails in the global steel market.