With the gulf region being hailed as the home of oil and natural gas resources, does the steel industry occupy a position of significance in these countries? Have the gulf countries already started to look beyond their natural resources to explore their potential in the global steel market? Let us find out.
The demand for steel in the Middle East or Gulf regions has primarily shot up owing to the growing construction activities there. The spurt of construction schemes in turn was primarily triggered by the liberalization of the real estate sector. This has been a steady growing phenomenon since the past few years. Much of the high revenues generated from the oil and natural gas sector have contributed to the flourishing construction business in the gulf.
The United Arab Emirates and the Gulf Corporation Council have witnessed meteoric rise in the demand for steel owing to the same reason. In recent past, the annual consumption of rebar was around 15 million— 65% of which was met by the Gulf Corporation Council mills.
Steel Industry in Gulf-Present Scenario
The dependence of the gulf countries on the steel industry is clearly on the rise. However at present they are heavily banking on imports which in turn result in exorbitant shipping charges. However efforts to combat the shortage of steel producers are already showing with Saudi Arabia raising its crude steel output to about 6.9 mt in the year 2012 from 4.67 mt in 2008.
The growth of shipbuilding in the Gulf Corporation Council has resulted in a steady consumption of steel here. ASRY or Bahrain’s Arab Shipbuilding and Repair Yard Company has built further on its capacity to accommodate increased number of ships.
Arabian nations are more and more inclined towards steel production in order to back their development projects and the steel industry here has seen one of the highest growth rates in recent times.
Some of the Leading Gulf Countries Producing Steel
United Arab Emirates spearheads the steel market of the gulf region in a major way producing roundabout 77% for the Gulf Corporation Council in during 2008.
Emirates Steel is one of the largest steelmakers in the country with the capacity of producing 715,000 tons of steel.Gulf Steel Industries in Sharjah UAE is a steel fabrication enterprise which specializes in erection of structural steel, fabrication of steel and engineering.
Oman has its fair share of recognition in the steel market as well with major Sohar Steel producing some high quality reinforcement bars.Kuwait along with Iran had commissioned a steel factory called United Steel in the year 2002. 65 million dollars had been spent for its construction that included 51% of the private sector in Kuwait.
- Rolling mills saddled with high prices and inadequate squares
- Eurozone crisis resulting in lowered export of flats
- Reluctance of investors to invest in Arab’s iron and steel industry
- Saudi Arabia is going to lead the construction business with an increased steel production of about 9% CAGR in 2012-2015
- Investment of around 285 billion dollar in construction in the entire Gulf area with the need of steel shooting up to 47.5mt as a consequence
- Bright opportunities for fresh market players