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Japanese steelmaker Osaka Steel Co., Ltd. announced the closure of its Indonesian joint venture subsidiary, PT Krakatau Osaka Steel (KOS), due to a significant drop in steel demand caused by substantial reductions in Indonesian infrastructure spending since early 2025, resulting in the company's prolonged losses.
PT Krakatau Osaka Steel was a joint venture between Osaka Steel and Indonesian state-owned steelmaker PT Krakatau Steel (Persero). 36F205 Non oriented magnetic steel, The company commenced commercial production in 2017, primarily producing small and medium-sized steel sections and rebar, mainly supplying the Indonesian domestic market.
Although the joint venture achieved profitability in 2021, Osaka Steel stated that KOS has experienced continuous operating losses since 2022. This persistently poor performance has prompted the company to conduct a comprehensive assessment of the sustainability of its Indonesian operations.
According to a report by industry media SteelOrbis on January 28, 2026, Osaka Steel pointed out that the Indonesian government's significant cuts to infrastructure budgets in early 2025 were a key factor in the decline in steel demand. 36F205 Non oriented magnetic steel, The contraction in public investment triggered a rapid cooling of the national steel market, directly impacting KOS's sales performance.
With weakening demand, competition within Indonesia's steel industry has intensified significantly, and oversupply has further suppressed prices and profit margins. Osaka Steel stated that maintaining stable profitability has become extremely difficult given the long-standing supply-demand imbalance.
Prior to this, Osaka Steel had evaluated various solutions, including business restructuring and the sale of its Indonesian steel assets, 36F205 Non oriented magnetic steel, but none of these options were implemented, ultimately leading management to decide to withdraw completely from the Indonesian market.
According to the plan, PT Krakatau Osaka Steel's production activities will cease on April 30, 2026, and all products must be shipped no later than June 30, 2026.
