Source: Kontan.co.id | July 5, 2026

The national steel industry is projected to enter a recovery phase in the second half of 2026 following a sluggish first half.

However, the improvement in demand is expected to remain gradual due to weak manufacturing activity and intense pressure from imported steel products.

Harry Warganegara, Chairman of the Indonesian Iron and Steel Industry Association (IISIA), stated that the steel industry’s outlook for the second half will be heavily determined by the acceleration of economic activity, the realization of construction and infrastructure projects, and improved performance in the manufacturing sector—the primary consumer of steel.

Nevertheless, current market conditions have not yet fully recovered.

This is reflected in Indonesia’s Manufacturing Purchasing Managers’ Index (PMI), which fell to 46.9 in June 2026, signaling that the manufacturing sector remains in a contraction phase.

“On the other hand, the national steel industry faces increasingly fierce competition due to mounting pressure from imported steel,” Harry told KONTAN on Friday (July 3, 2026).

IISIA views the outlook for the second half of 2026 with measured optimism.

According to Harry, industry recovery requires policy support capable of stimulating steel-consuming sectors while fostering healthier business competition.

The domestic market is expected to remain the primary driver of industry growth, particularly through the construction, infrastructure, manufacturing, and automotive sectors, as well as various investment projects.

Meanwhile, export opportunities remain open for competitive steel products in regional markets and developing nations, although these are overshadowed by weak global demand, excess capacity, and rising trade protectionism in various countries.

PT Steel Pipe Industry of Indonesia Tbk (ISSP) shares a similar view. Johanes W. Edward, ISSP’s Chief Strategy and Business Development Officer—who also serves as Corporate Secretary and Head of Investor Relations—projects that steel market conditions in the second half will improve compared to the first six months of the year.

According to him, increased infrastructure development, the continuation of private-sector projects, and spending in the manufacturing sector will be the primary drivers of steel demand through the end of the year.