MEIS 2013: Infrastructure investment will continue to fuel growth engine for Mena steel market

Large infrastructure projects remain the key driver for growth in the Middle East and North Africa (Mena) region, delegates were told at Metal Bulletin’s Middle East Iron & Steel conference in Dubai on Tuesday December 10.

Paragraph entered by Atlantic migration, in order for SteelFirst articles to display correctly on Metal Bulletin.

Flagship projects such as Expo 2020 in Dubai, the World Cup in Qatar in 2022, the economic city project in Saudi Arabia, and the expansion of the rail network in the region are driving steel consumption.

“All these are positive signs that indicate growth,” Al-Qadeeri said. “Demand [in the GCC] in the next 10 years will go up to 30 million tonnes,” he added.

The IMF is predicting 3.5% real GDP growth in the region for 2013 and 3.5-4% in 2014.

“The engine for this growth is the GCC – driven by high oil prices, but also strong commitment to recycle petro-dollars,” Richard Thompson, editorial director of MEED said.

“The oil price average for this year is around $105[per barrel], and a marginally lower forecast for 2014 at around $100. This is going to maintain high liquidity levels in the capital investment market and major project market in the GCC,” he added.

Saudi Arabia’s fast growing and young population will provide a platform for growth for many years to come.

“There will have to be a second phase of infrastructure investment. This will be good news,” Abdulaziz Sulaiman Al-Humaid, executive vp, metals, Sabic said.

While construction will remain the key driver for steel consumption in the region for many years to come, this will eventually change as local economies mature.

“Steel in construction growth will continue. In the UAE, in the long-term, steel consumption will switch to manufacturing – oil and gas, shipbuilding, may be the car industry, white goods applications,” Saeed Ghumran Al Romaithi, ceo of Emirates Steel said.

“Eventually construction will mature. We need to be planning for other applications for steel – this will come over time,“ he added.

Challenges in project implementation
But there are also challenges in for growth of steel demand in region such as labour issues in Saudi Arabia, the civil war in Syria, financing in Iraq, high youth unemployment and a scarcity of gas allocation.

The slowness and apparent lack of project implementation hampers steel industry expansion.

“There is investment, there are projects – but not at the speed you think. The projects which may take 2 years elsewhere, in our region take 5 to 7 years or may disappear before they happen,” Hilal Al-Turwairqi, chairman of Al Turwairqi Holdings said.

“We have to expand, create infrastructure, create jobs – are we doing that – the answer is “no”,” he said.

What to read next
Following a six-week consultation period, Fastmarkets can confirm it will amend the calculation method for all the average functions on the Fastmarkets platform from Wednesday March 1, 2023.
Consolidation, the recycling of electric vehicle batteries, US steel exports and the benefits of sustainable steelmaking were key talking points at Fastmarkets’ Scrap & Steel 2023 conference in Dallas in January
Green shoots of increased demand will emerge in US ferrous markets courtesy of the Biden administration’s trillion-dollar infrastructure package in 2023, Schnitzer’s executive vice president and chief strategy officer Richard Peach said at Fastmarkets’ Steel and Scrap Conference 2023 in Dallas, Texas
US special bar quality steel prices rose in January in line with rising scrap and alloy costs, according to market participants
European metal industry association Eurometaux has called on the European Commission to follow the lead shown by the Inflation Reduction Act and deliver a “powerful” policy to support the industry in the EU while it tries to keep up with the move to a new generation of energy markets
The fallout from Russia’s invasion of Ukraine is changing global trade flows for bauxite, with Brazilian material once again flowing into China and with the introduction of export restrictions elsewhere likely to influence availability through 2023
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.