PT Krakatau Osaka Steel ceased production in late April 2026 and plans to end all operations by June. The Indonesian Industry Ministry confirmed that chronic losses since 2022 led to this decision.

According to the officials, the closure was due to a combination of weak construction demand and a surge in inexpensive imports, particularly from Chinese producers.

Febri Hendri Antoni Arif, spokesperson of the Ministry of Industry, said that the government is reviewing strategies to protect local manufacturers from global oversupply and price pressure. Current support includes import controls and special gas pricing, yet the ministry admits additional policies are necessary.

The authority also demands that the company respect labor rights during this transition. This exit reflects overall struggles within the national steel sector as it battles low-cost competition and limited product variety.