The Middle East — a region that has seen massive steelmaking capacity expansion in recent years — could soon be self-sufficient in terms of its overall steel supply requirements, Emirates Steel CEO Saeed G Al Remeithi said Tuesday.
“I would say self-sufficiency [in] the next two or three years is what we see,” Remeithi told S&P Global Platts on the sidelines of the World Steel Association’s annual general assembly in Tokyo.
His prediction follows a report issued last month by the Organization for Economic Co-operation and Development (OECD) that showed of the roughly 39 million mt of additional steelmaking capacity currently in the planning phase worldwide, the Middle East will account for the bulk of that expansion.
About 31.5 million mt of new capacity is planned for completion in the Middle East by 2020. It’s a region that has already seen total steelmaking capacity expand by 39.7 million mt over 2007-2017 to reach 63.7 million mt, according to the OECD.
Remeithi said the United Arab Emirates and Saudi Arabia are already self-sufficient in terms of long products. Egypt is utilizing significant domestically produced material as well, he said.
“In the UAE, overall demand has been always healthy,” Remeithi said. “Even when the demand has dropped all around, in the UAE, we did not really feel it because [of the] infrastructure and construction that’s going on.”
About 90% of Emirates Steel’s production goes into the construction sector, he said. The UAE-based steelmaker has capacity to produce 3.5 million mt of rebar, wire rod and heavy sections.
“The whole area is really booming for construction,” Remeithi said, adding some infrastructure investments had stalled over the past several years due to slumping oil prices. “For the second half of the year, we see a little bit of very slow demand in the country, but I hope that we will be having oil prices came back now and that will be changed in 2019,” he added.
Emirates Steel’s overall positive outlook for steel consumption in the region comes as worldsteel’s short-range outlook released Tuesday showed the Middle East should realize 2.1% steel demand growth this year to 54.5 million mt. That’s up from just 0.4% year-on-year demand growth in 2017, when consumption totaled 53.3 million mt.
For 2019, steel demand in the region is expected to grow a further 1.2% year on year to 55.1 million mt, according to worldsteel.
Source: Platts / Hellenicshipping News