The Indonesian government targets to see domestic steel production rise by 5% year-on-year (y/y) in 2017, in line with estimations of accelerating macroeconomic growth. Last year domestic demand for steel in Indonesia was 12 million tons, with demand especially originating from infrastructure and construction projects. However, domestic steel producers could only supply 6-7 million tons, the remainder coming (mainly) from China, the world’s biggest steel producer (and consumer). China can therefore export steel at low prices, hence becoming more attractive than Indonesian steel. Moreover, Chinese steel is considered to be higher quality steel.