Krakatau Steel's losses mount

OREANDA-NEWS. Indonesian state-controlled steelmaker Krakatau Steel posted a tenfold increase in losses last year, driven by fall in product prices and losses at its joint venture with South Korean steelmaker Posco.

Krakatau posted a loss of \$149.8mn for 2014 compared with a \$13.8mn loss in 2013. Sales volumes last year fell by 2pc from a year earlier to 2.32mn t. Kratakau accounts for nearly 75pc of Indonesia's total steel output with a 2.45mn t/yr capacity.

The joint venture with Posco, which operates a 3mn t/yr steel mill in Cilegon, was still on a learning curve, Kratakau said, with it posting a loss of \$71.6mn last year. The plant started operations in December 2013.

Chinese steel exports into southeast Asia pushed flat product prices to \$460-470/t cfr in December 2014 from \$530-540/t cfr at the start of the year, Krakatau said . The company's sales price of hot-rolled coils fell by 3.1pc against the previous year, while prices of its long products such wire rods and steel bars fell by 6.1pc.

Krakatau is installing a 1.2mn t/yr blast furnace to expand its production capacity, with it expected to be operational in this year's second half.