Indonesia's Krakatau Steel has started up its new hot strip mill 2, or HSM 2, at Cilegon, Banten, adding 1.5 million mt/year of hot-rolled coil production capacity, the company said Sept. 21 at the inauguration ceremony.

          The steel mill, which costs $521 million, will boost the steelmaker's overall HRC output 62.5% from its previous capacity of 2.4 million mt/year.

          The main product of HSM 2 is HRC to meet the demands of the automotive market with high quality specifications, Silmy Karim, president director of Krakatau Steel said.

          HSM 2 forms part of a 10 million mt/year steel cluster that both Krakatau and its subsidiary, Krakatau Posco, are developing by 2025. With HSM 2 online, the cluster will have an overall output of 7 million mt/year.

          Krakatau Posco, a 70:30 joint venture with South Korea's POSCO being the majority stakeholder, operates an integrated steel mill at Cilegon, Banten, with a production capacity of 3 million mt/year. The venture has plans to increase production to 6 million mt/year under a phase two project.

          Indonesian president Joko Widodo, who inaugurated HSM 2, said he hopes domestic steel production will increase so that the country can save foreign exchange worth IDR 29 trillion ($2.04 billion) per year, adding that he hoped HSM 2 could meet domestic steel requirements.

          Indonesia is preparing for a huge rise in steel demand as the country plans to move its capital from Jakarta to East Kalimantan in 2024, which could be a potential prize for local steelmakers if import options were to be restricted.

-- Steel Business Briefing