Saeed Al Remeithi, ceo of the United Arab Emirates biggest steelmaker, Emirates Steel, said that GCC countries were acutely aware of the issue and are keen to limit the impact of steel being redirected from the US.
The GCC countries are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE.
“We see positive support from the authorities in the UAE and also in Saudi Arabia in moving to this direction - everybody is seeing what damage is being done and what’s happening to the steel industry in the region,” Al Remeithi said at Metal Bulletin’s 6th World DRI & Pellet Congress in Dubai in late April.
“It’s a bit slow because the whole GCC is linked together [in terms of anti-dumping legislation] but something is definitely happening - the region is lacking the rules and regulations that we need to give us freedom to compete fairly in the market,” he said.
In March, Saudi Arabia’s National Committee for the Steel Industry (NCSI) called for urgent action to be taken against imports being dumped in the country, specifically by raising import duties.
US President Donald Trump signed the 25% Section 232 tariff into law on March 8, with the tariff applying to imports from March 23.
Rebar imports into the UAE have fallen in recent years, as the country promotes measures to support self-sufficiency in the steel sector.
Rebar volumes from Turkey, the largest source of rebar imports into the UAE, fell sharply - by 87.53% - year on year to 139,453 tonnes in 2017, down from 1.12 million tonnes in 2016.
Metal Bulletin’s weekly price assessment for UAE rebar imports was $565-570 per tonne cfr Jebel Ali on May 8, down over the month from $590-600 per tonne cfr on April 10.
The UAE currently consumes around 3.5 million tpy of rebar, with Emirates Steel holding a 60% share of the domestic market.
The direct impact of the 25% US tariff on steel imports from all origins - with some notable exceptions - will have a limited impact on Emirates Steel exports, according to Al Remeithi.
“From our point of view, the demand outlook for rebar [for] 2018-2019 looks stable - we have the 2020 Dubai Expo and related infrastructure construction currently going on in the UAE,” Al Remeithi said.
“Right now, the market is still resilient and demand is still there - [and even] if there is not an increase, it will still be stable,” he added.
Emirates Steel lowered its rebar offers to 2,223 dirhams ($605) per tonne ex-works on April 25, down from 2,412 dirhams per tonne ex-works on March 27, which was its highest level since March 2013.
Domestic demand in the UAE is currently poor and is not expected to pick up until after the Islamic holy month of Ramadan, which begins in mid-May.
“We see a slowdown in Saudi Arabia, but I hope there will be more projects coming into the market from the second half of the year; so we will see demand picking up,” Al Remeithi said.
Emirates Steel is diversifying its product portfolio with the introduction of value-added wire rod and sections grades.
“This strategy has to come with the market to take our product. We want to see a take-off from small- or medium-sized downstream companies in our local markets,” Al Remeithi added.
DR pellet supply
Tight supplies of direct-reduction (DR) grade pellets will continue to remain an issue, according to Al Remeithi, adding that pellet demand is rising at the same time that a limited amount of new DR pellet production is entering the market.
“The shortage of DR-grade pellets will be an issue soon, unless Samarco returns to the market,” Al Remeithi said.
“Companies will have to really secure their sources of pellet and this is what we are trying to do on a long-term basis - this is one of the key issues for the business,” he added.
Brazilian iron ore pellet producer Samarco, which has a 30.5 million tpy pelletizing capacity, will aim to resume production at the beginning of 2019, “in the best scenario,” its chief executive officer, Fabio Schvartsman, said on April 26.
Emirates Steel has also developed a light steel scrap shredder with capacity for 350,000 tonnes per year so it can use local scrap as an alternative feedstock during periods of high price volatility.
Gulf Co-operation Council (GCC) countries are finding common ground over the threat from steel being redirected as a result of the United States decision to impose tariffs on imports.