Industry News

The following is a comprehensive analysis of the Indonesian light steel keel market, combined with dimensions such as policy environment, demand driven, supply chain, and competitive situation:
1、 Core driver of market demand
Explosive growth in the construction industry
The construction of the new capital of Indonesia, Nusantara (with a total investment of 230 billion US dollars), has driven a 49% year-on-year increase in residential development from 2022 to 2024, with a 21% growth in star rated hotels, generating a demand for trillion level decorative materials, and a strong demand for light steel keel as a foundation material for partition walls and ceilings.
The vacancy rate of office buildings in Jakarta is only 8%. In 2024, the supply of commercial real estate will exceed 11 million square meters, and the demand for light steel keel will surge in sync with the building materials market.
Climate and policy adaptability
The geographical environment of high temperature, rainy weather, and frequent typhoons requires building materials to have high wind and earthquake resistance performance, and the structural advantages of light steel keel are in line with local climate requirements.
Under the trend of green building, light steel keel has been included in the scope of policy support due to its recyclability, in line with the government's carbon neutrality goals.

2、 Current situation and challenges of supply chain
Local production capacity gap relies on imports
In 2024, Indonesia's crude steel production will only be 17 million tons, accounting for less than 1% of global production. The self-sufficiency rate of steel is low, and the raw materials for light steel keel will rely on imports for a long time.
China is the largest source of imports, accounting for 55% of Indonesia's total steel imports (2023 data), with significant cost-effectiveness advantages.
Trade barriers and localization opportunities
Indonesia has implemented SNI certification or import quotas for steel, cement, and other products, forcing foreign-funded enterprises to localize production (such as Hailuo and Liansu, which have already established factories).
Local steel enterprises are mainly small and medium-sized, with the largest enterprise Krakatau Steel having a crude steel production capacity of 5.9 million tons, accounting for more than 50% of the national production capacity. However, the production capacity of high value-added products is insufficient.

3、 Competitive landscape and entry barriers
Market participant strategy
Local enterprises dominate the mid to low end market, but their technological processes are outdated; Chinese enterprises avoid trade barriers and seize high-end market share by setting up factories (such as Ruijie Light Steel).
The distribution channels for building materials are concentrated in traditional markets (such as Pinangsia in Jakarta) and chain supermarkets (Mitra 10), highlighting the importance of local dealer networks.
Core access barriers
Compulsory certification: SNI national standard certification or CIDB license is required, and exported products must comply with international standards such as CE/EN 14195.
Cost pressure: High industrial natural gas prices push up production costs, coupled with weak logistics infrastructure (low transportation efficiency outside Java).

4、 Future growth opportunities
Policy and Infrastructure Dividends
The "2045 Golden Indonesia Vision" promotes infrastructure investment, and the construction industry is expected to reach a scale of $407.8 billion by 2029, with a compound annual growth rate of 7.5%. The demand for light steel keel continues to increase.
Expansion of emerging application scenarios
The customized home market is booming: From 2023 to 2024, the revenue of Chinese customized home enterprises in Indonesia will increase by 32%. Light steel keel has great potential for application in partitions and customized cabinets.
Popularization of prefabricated buildings: The government promotes prefabricated housing systems, and light steel keel composite wall panels have become the preferred solution due to their fast installation and strong weather resistance.
Advantages of Chinese Enterprises Going Global
The RCEP agreement reduces tariff costs, and Chinese enterprises can leverage Indonesia to radiate the 600 million population market of ASEAN, filling the domestic high-end gap with technology exports such as high weather resistant galvanizing processes