Indonesia's Gunung cuts reliance on slab imports with new caster
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Indonesia's Gunung cuts reliance on slab imports with new caster

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Indonesia’s Gunung Steel Group plans to reduce its dependence on imported slabs through the commissioning of a brand new continuous slab caster by the end of this year.

“Next month we’ll start producing slabs – we’ll be making a trial of 10,000 tonnes,” a company source told Steel First.

“We’ll be able to produce a wide range of slabs and rely less on imports,” he added. 

The caster, which was ordered at the end of 2011 from Germany’s SMS Siemag, will have capacity to produce 1.2 million tpy of slabs of 220-250mm thicknesses and 800-2,100mm widths comprising structural steel as well as pipe and heavy plate grades. 

Crude steel will be produced via an electric arc furnace (EAF) and a ladle furnace, also supplied by the German plant manufacturer. 

All pieces of equipment were installed at Gunung’s works in Bekasi, West Java, which currently operates a long steel line for the production of sections and wire rods and a flat steel line producing heavy plates and pipes. 

Slab tenders
Indonesia’s largest private steelmaker, Gunung had been importing as much as 2 million tpy of slab in recent years to produce between 1.5 and 2 million tpy of flat steel products, the source said. 

“From now on we plan to use around half imported slabs and half of our own slabs,” he said when queried about an estimated volume of imported slabs for the next few years. 

Apart from importing a lower volume, the company has also recently started to operate through tenders for its international slab procurement. 

“Until recently we used to negotiate [slab purchase deals] individually with each supplier, but we started to do tenders,” the source noted. 

“We plan to do the same with scrap – as scrap and slab are our two main raw materials,” he added. 

Carrying out tenders for both products will help the company to evaluate which route is more profitable at specific periods. 

“If it’s cheaper to import scrap and produce slab we’ll do it, if it’s cheaper to import slab we’ll do it,” he explained. 

One such slab tender closed a few weeks ago without any winner, he confirmed, as import prices had been quickly moving down in Southeast Asia and East Asia.

The latest concluded price was heard at around $470 per tonne cfr Indonesia, but tradable levels would be likely below that mark now, he said. 

Steel First assessed slab import prices in Southeast Asia and East Asia at $455-470 per tonne cfr on Monday November 24, down from $460-480 per tonne cfr in the previous week. 

Expansion plans
At the moment, Gunung has two EAFs able to produce a combined 1.2 million tpy of crude steel. 

The EAF supplied by SMS Siemag will be the company’s third. 

Gunung has been also developing a steelmaking complex in Medan, North Sumatra, comprising a blast furnace with capacity of almost 800,000 tpy, as well as sintering plant and hot treatment plant. 

The complex, which will host a 1-million tpy billet caster and two 500,000 tpy rebar and wire rod mills, is being developed through a50:50 joint venture signed early this year with China’s Nanjing Iron & Steel (Nangang).



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