Indonesia’s anti-dumping committee opens an investigation into Chinese galvanised steel after finding Beijing supplied 81 per cent of a 2.56 million tonne import wave
JAKARTA, 19 September 2026 – Indonesia has become the latest Southeast Asian economy to turn its trade defence machinery on Chinese steel. On 15 September the Indonesian Anti-Dumping Committee, known by its Indonesian acronym KADI, announced the initiation of an anti-dumping investigation into imports of galvanised zinc-coated steel sheet originating in China, acting on a petition from two of the country’s largest coated steel producers.
The case is significant beyond its immediate commercial scope. Indonesia is simultaneously a major steel importer, a rapidly expanding steel producer and the destination for a substantial share of Chinese export tonnage that has been displaced from Europe, India and other markets by trade remedies imposed over the past two years. The KADI investigation is, in effect, Jakarta testing whether it intends to remain an absorber of that displaced volume.
The petition and the petitioners
The investigation follows an application lodged by PT Tata Metal Lestari and PT ArcelorMittal Nippon Steel Indonesia. The pairing is notable. Tata Metal Lestari is a domestically focused coated steel producer, while ArcelorMittal Nippon Steel Indonesia is the local vehicle of a joint venture between two of the largest steelmaking groups in the world. A petition carrying both a domestic champion and a multinational joint venture is harder for an investigating authority to characterise as narrow special pleading.
KADI’s preliminary assessment found sufficient evidence that increased Chinese imports had injured domestic producers, which is the threshold required to move from petition to formal investigation. Relevant producers, exporters, importers and government representatives have been notified, opening the questionnaire and submission phase.
The numbers behind the case
The import data KADI cited is the core of the case and is unusually stark.
Over the three years from 2023 to 2025, Indonesia imported 2.56 million tonnes of the products concerned. Of that, 2.08 million tonnes came from China, representing approximately 81 per cent of the total. A single origin accounting for four fifths of import volume in a product category is the kind of concentration that makes an injury case comparatively straightforward to argue, provided the pricing evidence supports it.
The investigation covers a defined set of tariff lines under Indonesia’s 2022 customs tariff book: HS 7210.49.11, 7210.49.17, 7210.49.18, 7210.49.19, 7212.30.12, 7212.30.13, 7212.30.19, 7225.92.90 and 7225.99.90. The list spans both narrow and wide coated product and includes alloy categories under heading 7225, which suggests the petitioners anticipated attempts to reclassify material into alloy grades to escape any resulting measure. That is a sensible precaution. Adding trace quantities of boron or chromium to qualify a product as alloy steel is one of the most widely used circumvention techniques in the global steel trade, and authorities that fail to capture alloy headings at the initiation stage routinely find themselves running a second case eighteen months later.
KADI has indicated the investigation will take up to 12 months, with a possible extension to 18 months. That timeline is consistent with Indonesian practice and with World Trade Organization disciplines on the conduct of anti-dumping investigations.
Why now
Three pressures converged on Indonesian coated steel producers during 2025 and 2026.
The first is Chinese export volume. Chinese steel exports have run at historically elevated levels as domestic construction demand has remained weak, and coated flat product has been among the fastest growing export categories because it carries more value per tonne than hot-rolled coil and because it serves construction and appliance markets that exist everywhere.
The second is the closing of alternative markets. The European Union cut its tariff-free steel quota volumes by 47 per cent to 18.3 million tonnes a year with effect from 1 July 2026 and doubled the out-of-quota duty to 50 per cent. India has operated a three-year safeguard on flat steel. Vietnam has definitive anti-dumping duties of 23.10 to 27.83 per cent on Chinese hot-rolled coil and is finalising an anti-circumvention case on wider coil. Australia maintains measures on zinc-coated steel from several origins and is reviewing whether to continue them. Each closure pushes tonnage toward whichever market remains open.
The third is Indonesia’s own capacity build. Indonesian coated steel capacity has expanded significantly, partly through investment by exactly the kind of joint venture that has now filed the petition. New capacity commissioned into a market being supplied at low prices by imports generates a political constituency for protection very quickly.
Stakeholder positions
The domestic producer case is straightforward. Local mills argue that Chinese material is entering at prices below normal value, that the resulting price suppression is preventing them from achieving reasonable returns on recently commissioned capacity, and that the 81 per cent import share demonstrates the scale of the displacement.
Indonesian downstream users take a different view, and their objection carries weight in a country where construction, automotive assembly and white goods manufacturing are all priority sectors. Coated steel is an input to roofing, cladding, ducting, appliance casings and automotive body panels. Duties raise input costs across all of those chains, and Indonesian fabricators compete in export markets against rivals in Vietnam and Thailand who would not face the same charge.
Chinese exporters and the Chinese government have consistently characterised such cases as protectionist responses to legitimate competitive advantage. China’s Ministry of Commerce has been active in its own right, running anti-dumping cases against Japanese, Korean and European producers across several product categories during 2026, and Beijing has shown a willingness to respond to trade actions with reciprocal measures where it judges that useful.
The Indonesian government sits between these positions. Jakarta has an industrial policy commitment to downstream value addition in metals, most visibly in nickel, and an interest in seeing domestic steel capacity utilised. It also has an interest in keeping input costs low for its manufacturing export sector, and a diplomatic relationship with Beijing that includes very large Chinese investment in Indonesian industry.
Economic impact analysis
The direct effect of any resulting duty depends on the margin, which will not be known until a preliminary determination. But the volume exposure can be estimated now.
Chinese shipments of the covered products averaged roughly 693,000 tonnes a year over the 2023 to 2025 period. At a typical galvanised sheet value, that is a trade flow in the order of several hundred million dollars annually. A duty in the range commonly applied in regional coated steel cases, say 15 to 30 per cent, would add tens of millions of dollars to the landed cost of that volume if it continued to flow at the same rate.
It will not. The consistent pattern in coated steel cases is that a duty of that magnitude causes Chinese volume to fall sharply and to be replaced by a mix of domestic production and imports from origins not covered by the measure. Vietnam, Korea, Taiwan and India are the most likely substitutes for Indonesian buyers, and all four have coated capacity capable of serving the market.
That substitution creates the next problem. If Indonesian imports from Vietnam rise sharply in 2027 and 2028 while Chinese imports fall, the petitioners will have a strong prima facie case for either a new investigation against the substitute origins or an anti-circumvention case if the material is Chinese substrate coated in Vietnam. This is the standard sequence and Indonesian producers will be watching for it.
For Indonesian downstream manufacturers, the cost impact is real but modest in percentage terms. Coated steel is typically 20 to 40 per cent of the input cost of a metal roofing product and a smaller share of an appliance. A 20 per cent duty on a subset of supply that gets partially substituted might raise finished product costs by low single-digit percentages. That is enough to matter in competitive export markets and not enough to be visible to domestic consumers.
Implications for global supply chains
The Indonesian case should be read by international traders as one more data point in a clear and accelerating trend.
For Chinese exporters, the addressable market for coated flat steel continues to narrow. Europe is restricted by quota and duty. India has a safeguard. Vietnam has duties and an anti-circumvention case. Australia has measures under review. Indonesia is now investigating. The remaining open markets in Southeast Asia, the Middle East and Africa are smaller and are themselves becoming more active in trade defence. Chinese mills that built export-oriented coating capacity are facing a structural rather than cyclical squeeze.
For buyers everywhere, the practical lesson is that origin diversification is no longer optional. A procurement strategy that relies on a single origin for a commodity steel product now carries a genuine probability of that origin becoming duty-liable within an eighteen-month horizon. Qualifying a second and third supplier in advance is cheaper than doing it under duty pressure.
For coated steel producers in Vietnam, Korea, Taiwan and India, the Indonesian case represents an opportunity and a warning in equal measure. The opportunity is the volume that will vacate if duties are imposed. The warning is that capturing that volume too quickly and at prices too low is the fastest route to becoming the subject of the follow-on investigation.
For importers of record in Indonesia, the immediate practical issue is contractual. Anti-dumping duties, if imposed, will be payable by the importer. Shipments contracted now for delivery in 2027 may arrive after a preliminary determination, and Indonesian practice permits the imposition of provisional measures during an investigation. Any contract signed in the current window should allocate that risk explicitly rather than leaving it to be argued after the fact.
The regional picture
Southeast Asia has become the most active trade remedy region in the world for steel, and the reasons are structural rather than political.
The region combines rapid growth in domestic steelmaking capacity, much of it financed by Chinese, Japanese, Korean and Indian investment, with proximity to the largest steel exporter on earth. That combination generates repeated import surges into markets whose new capacity is still working through its debt service. Trade remedies are the predictable result.
Vietnam has moved fastest, running definitive anti-dumping duties on Chinese hot-rolled coil at 23.10 to 27.83 per cent under case AD20 and following up with anti-circumvention case AC03.AD20 covering coil wider than 1,880 millimetres and up to 2,300 millimetres. Thailand, Malaysia and the Philippines all maintain active measures on various steel categories. Indonesia’s case adds the region’s largest economy to that list in the coated product segment.
What is notable is how little of this activity flows through the World Trade Organization’s dispute settlement system. The Appellate Body remains unable to hear appeals, and members have increasingly resolved to act unilaterally within the anti-dumping and safeguard frameworks rather than litigate. That makes the pace of measure-by-measure escalation faster and the prospect of multilateral discipline more remote.
What happens next
KADI will now circulate questionnaires to Chinese exporters, Indonesian importers and domestic producers. Exporters who cooperate fully and provide verifiable cost and pricing data generally receive individual margins; those who do not receive a residual rate calculated on facts available, which is almost always higher.
A preliminary determination, if one is made, could come within the first half of the 12-month window and could carry provisional duties collected as deposits. A final determination is due within 12 months of initiation, extendable to 18 months, which places the outer deadline in March 2028.
Chinese exporters with a meaningful Indonesian book should engage early. The difference between a cooperating rate and a facts-available rate in comparable regional cases has frequently exceeded ten percentage points, and the cost of responding to a questionnaire is trivial against that gap.
Indonesian buyers should model their 2027 supply on the assumption that Chinese coated steel becomes materially more expensive and should begin qualifying alternatives now. And producers in the likely substitute origins should price their Indonesian offers with one eye on the injury data that Indonesian mills will be compiling from the day the first replacement cargo lands.
The nickel precedent
To understand how Jakarta is likely to handle this case, it helps to look at what Indonesia did with nickel.
Beginning in 2014 and decisively from 2020, Indonesia banned the export of unprocessed nickel ore in order to force downstream investment onto Indonesian soil. The policy was challenged at the World Trade Organization by the European Union and Indonesia lost at panel stage, but the underlying objective was achieved. Smelting, refining and increasingly battery precursor capacity was built in Indonesia, and the country converted a raw material position into an industrial one.
The lesson Indonesian policymakers drew was that industrial policy which creates domestic capacity generates its own political constituency, and that constituency then supports the next stage of protection. Steel follows the same logic. Capacity built with foreign joint venture capital, as in the case of ArcelorMittal Nippon Steel Indonesia, produces a domestic industrial interest that is also a foreign investor interest, which makes protection easier to justify diplomatically.
This matters for how the current case is likely to be decided. An anti-dumping investigation is formally a technical proceeding about pricing and injury. In a country running an explicit downstreaming strategy, it is also an instrument of industrial policy, and the probability of a finding of no dumping is correspondingly lower.
Numbers that will drive the determination
Three variables will decide the margin if one is found.
The first is normal value. China is frequently treated by investigating authorities as presenting particular difficulties in establishing domestic prices that reflect market conditions, and some jurisdictions apply surrogate country methodology. Indonesia’s practice is to work from Chinese domestic prices where the exporter provides verifiable data, and to construct a value or use facts available where it does not. The choice between those approaches can swing a margin by twenty percentage points or more.
The second is the export price. Galvanised sheet is sold on specification, and Chinese exporters serving Indonesia typically offer a range of coating weights, substrate grades and widths. Matching export transactions to comparable domestic sales is the most technically contested part of any coated steel case, and exporters who maintain clean product-level cost accounting have a meaningful advantage.
The third is the injury calculation. KADI’s preliminary assessment found sufficient evidence of injury to justify initiation, but the final determination will need to establish the causal link with more rigour. Indonesian mills will need to show that their price suppression, capacity underutilisation or margin compression tracked the Chinese import volume rather than tracking global steel prices or domestic demand weakness. With 81 per cent import concentration from a single origin, that is an easier showing than it would be in a more fragmented market.
The freight and currency dimension
Two factors often overlooked in regional steel cases will shape the commercial outcome regardless of the legal one.
Freight from Chinese east coast ports to Jakarta, Surabaya and Belawan is short and cheap, and Chinese mills have access to consistent vessel availability. Freight from India or Korea is longer and less regular. A duty of fifteen or twenty per cent partially offsets the Chinese freight advantage but does not eliminate it, which means Chinese material may remain competitive at lower volumes even under duty.
Currency is the second factor. The rupiah has been volatile, and Indonesian importers buying in dollars carry exchange risk that domestic purchase avoids. A weaker rupiah amplifies the effect of any duty, because the duty is levied ad valorem on a dollar-denominated customs value. Indonesian buyers modelling post-duty costs should stress-test against currency as well as against the duty rate.
What the case says about Chinese steel exports
Chinese steel exports have been running at levels not seen since the mid-2010s, driven by a domestic construction downturn that shows no sign of reversing quickly. Coated flat product has been among the fastest-growing export categories because it commands a higher price per tonne than hot-rolled coil and because it serves construction and durable goods markets that exist in every developing economy.
The Indonesian investigation is therefore one node in a much larger adjustment. Chinese coating capacity was built for a domestic market that has shrunk, and the export outlet for that capacity is closing market by market. Europe has quotas and duties. India has a safeguard. Vietnam has definitive duties on Chinese hot-rolled coil and an anti-circumvention case on wider coil. Australia has measures under review. Now Indonesia, the largest economy in Southeast Asia, has opened a case.
The arithmetic does not resolve. Chinese mills cannot place the tonnage domestically and cannot place it in the markets that are closing. The likely path is a combination of capacity rationalisation in China, deeper discounting into the remaining open markets, and an acceleration of Chinese investment in offshore coating capacity located inside the tariff walls, particularly in Southeast Asia and the Gulf.
That last route is the one Indonesian producers should watch most carefully. Chinese-owned coating capacity built in Vietnam, Malaysia or Indonesia itself is not subject to a measure against Chinese origin. It changes the ownership of the competition without changing the competition.
Timeline and next steps
KADI will circulate questionnaires to Chinese exporters, Indonesian importers and the petitioning producers. Response deadlines in Indonesian practice are typically thirty to thirty-seven days from issue, extendable on request.
A verification phase follows, in which the authority may visit exporter premises to confirm the accuracy of submitted cost and sales data. Exporters who decline verification generally receive facts-available treatment.
A preliminary determination with provisional measures is possible from sixty days after initiation under WTO disciplines, though Indonesian practice has often run longer. A final determination is due within twelve months, extendable to eighteen, placing the outer boundary in March 2028.
Interested parties outside Indonesia, including exporters in third countries who expect to benefit from any measure, are generally entitled to file submissions. Doing so is unusual but can be valuable where the substitute origin wants to establish early on the record that its own pricing is at normal value.
For the many international traders who move coated steel through Southeast Asia, the practical advice is unglamorous and unavoidable. Track the case, document your origins, price your 2027 offers with the duty risk included, and assume that whatever displaces Chinese material into Indonesia will itself be under investigation within two years.