Steelmakers in South East Asia have one major disadvantage: their dependence on imported raw materials. Their position -as smaller buyers- is vulnerable to seller’s bully.  Krakatau Steel -the most integrated plant in the region- is looking forward to overcome this weakness by vertically integrating their operation with domestic iron suppliers.  The missing supply chain will be put together as iron ore explorations in Indonesia are expected to operate in the near future.  It was reported that at least two iron projects are being undertaken in Indonesia planned to supply Krakatau Steel.  The first is the Chinese group of companies’ project to explore iron mines in Kalimantan and the other one is AKD Ltd of Australia pig iron project in Yogyakarta, southern part of central Java.  When the projects completed, Krakatau Steel will be fully integrated backward and satisfies the iron needs from internal sources.

(News sources: Antara, Metal Bulletin)