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Hussain said while market may look calm on the surface, it has been extremely strained underneath, adding that for steelmakers in the region, even the Covid crisis was not as challenging as the current situation.
AGSI is one of the leading steelmakers in the United Arab Emirates. The company produces net-zero-carbon steel using a fully electric steelmaking route based on 100% recycled raw materials sourced locally, making it one of the region’s largest recyclers of locally sourced scrap, according to market information.
Tensions in the Middle East escalated on February 28, following a series of military attacks involving the US, Israel and Iran, with further military actions reported across parts of the Gulf Cooperation Council (GCC) region.
The biggest shock to the steel market came when shipping through the Strait of Hormuz was disrupted. According to latest market information, the route remains high risk for cargoes moving from Asia to the eastern Arabian Peninsula, including the UAE, Qatar, Kuwait and eastern Saudi Arabia.
Nearly a month after the conflict began, on Friday March 27, Israeli strikes hit two major Iranian steel plants, Khouzestan Steel and Mobarakeh Steel, according to media reports. Iranian media later published a list of steel producers in Israel and five countries in the GCC region that were warned they could be targeted in potential attacks.
Following the conflict escalation and delivery disruption, the Jebel Ali port in Dubai, previously a key destination for cargoes from Asia, had effectively become non-operational for steel imports, according to market sources.
“For years, we’ve had such wonderful port logistics and frequency of vessels in the region — Chinese vessels, Indian vessels, the supply chain has been so seamlessly integrated,” Hussain said. “We just relied on it, but costs have exploded.”
Before the conflict, container prices from India were around $300 per container, according to the executive, later reaching $3,500 per container, while vessel frequency has dropped from four ships per week to one, maybe two. Prices from China increased from $800-900 per container to $6,500-7,000 per container, he said.
AGSI is one of the major participants in the UAE rebar market, which has been affected by a shortage of imported steel billet. The country has previously relied on billet supplies from China and Indonesia, while Iran has also been a major regional exporter of billet and slab. But the disruption to shipping routes has raised questions about alternative sources.
“I don’t think any of these producers can give the volume historically given from Asia,” Hussain said, when asked whether mills in Oman or Qatar could fill the supply gap.
According to the executive, there is currently very little visible billet trade into the Gulf, with only a couple of container vessels arriving. He said that food and essential goods were being prioritized, while steel and raw materials were very low in the order of importance.
Fastmarkets weekly price assessment for steel billet import, cpt Jebel Ali, UAE was unchanged at $460-480 per tonne on Tuesday March 31. The price has been static since February 24.
The steel market has been forced to consider alternative ports for deliveries from Asia, such as Sohar in Oman and Fujairah in the UAE. But those ports are not designed to handle such large volumes, Hussain said, with Fujairah lacking sufficient bulk handling capacity and shore cranes.
He added that only self‑geared vessels can discharge in Fujairah, but some are still turned away because they lack sufficient equipment and would block the port for too long.
Even where cargo can be discharged, logistics costs remain high, the CEO said. Internal transportation costs have more than doubled in March due to higher diesel prices, while importers in the UAE now face additional costs of around $40 per tonne to move cargo from Sohar, including $25 per tonne for inland trucking and $15 per tonne discharge fees.
Fastmarkets amended the calculation of its price assessments for rebar and steel billet imports into Jebel Ali from a CFR basis to a CPT basis on March 23 to reflect delivery changes in the region.
The disruptions have impacted rebar prices in the UAE, pushing levels up both for the domestic material and imports, market sources have told Fastmarkets.
Emirates Steel, the leading steel producer in the country, rolled over its official rebar offer for April at 2,721 dirhams ($741) per tonne ex-works to support market stability. Other mills, however, announced price increases due to rising cost pressures, market participants said on March 31.
Industry sources reported that a large producer sold around 160,000-170,000 tonnes of rebar at 2,673 dirhams per tonne ex-works for April, while a second major producer raised its April offer to 2,700-2,715 dirhams per tonne ex-works, up by 200-215 dirhams per tonne from March levels at 2,500 dirhams per tonne ex-works.
A trader told Fastmarkets on Tuesday that while “Emirates Steel has been responsible in its pricing, others [are maybe being] opportunistic.”
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar) domestic, exw UAE was 2,673-2,700 dirhams per tonne on March 31, up from 2,470-2,690 dirhams per tonne a week earlier.
Rebar imports from Oman were heard at $724 per tonne CPT for April, with offers reaching $730 per tonne CPT, up from latest deals at $682 per tonne CPT in March.
The trader expected lower rebar consumption in the UAE in April, around 450,000 tonnes including imports, down from 525,000 tonnes in March and 550,000 tonnes in February and January. Other market sources also stressed that supply of material in the region was uncertain due to the logistics difficulties.
Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar) import, cpt Jebel Ali, UAE was $724-730 per tonne on March 31, up from $673-682 per tonne a week earlier.
Despite construction activity still being quite strong in the UAE, with everyone trying to finish what they have started, Hussain said he expects demand and supply to rebalance as delivery constraints limit production.
According to the executive, no producers reported halted operations in March, but slowdowns and closures could emerge in April and May, with the second expected to be the most challenging month. Mills across the region may operate at around 50% of their full capacity due to higher costs and limited raw materials availability, the CEO said, as idling one mill costs around $1 million per month.
Despite the situation in the region, AGSI’s rebar expansion plans remain on track, Hussain told Fastmarkets, confirming that the new HRM3 rolling mill is awaiting final acceptance and expected to be fully operational in April.
In January, AGSI announced that HRM3 will have rolling capacity for 600,000 tonnes per year of rebar, while the older HRM1 mill is being upgraded to double its capacity to 800,000 tpy. It is planned to be shut down in the second quarter of 2026 and back up in the third quarter, after the upgrade is done.
Once the expansion plans are completed, AGSI’s total rebar capacity would rise to around 1.64 million tpy, according to its previous announcement. The producer currently makes around 55,000-60,000 tonnes of billet per month, but once the upgrades are completed it will need to purchase an additional 60,000 tonnes of billet per month to fully utilize its three rolling mills, the executive said on Wednesday.
According to Hussain, AGSI has already paused one rolling mill and may suspend the rest if billet supply does not improve in the short term, but plans are still under discussion.
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