Steel demand in MENA to rise

Steel demand to rise

With the construction industry in the Middle East and North Africa rapidly recovering and several major projects underway, it is no surprise to learn that the region's steel demand is set to rise by 7 percent to around 60 million tonnes, according to Egypt's largest steelmaker.

George Matta, marketing director of Egyptian firm Ezz Steel, said that despite this he expected the region's consumption to fall by a slight 2 percent this year to 55.9 million tonnes.

"Construction activity is likely to be supported by government spending," Matta said

This year, despite the price of steel plummeting by 55 percent, the likes of Saudi Arabia and other MENA countries invested in steel plants and increased output. In Saudi Arabia alone, steel consumption rose by about 36 percent, this year to 6 million tonnes.

High steel consumption

However Matta said that steel consumption of oil exporting countries such as Saudi Arabia, was hardly hit by volatile oil prices.

"The huge decline in revenues of oil exporting countries will result in 7 percent contraction of their steel consumption versus 15 pct growth from non-oil exporters," he told a steel conference organized by Metal Bulletin.

Due to the large number of projects in the Middle East, Matta said he expected demand growth in the region to exceed supply growth with next year's supply estimated to be around 42 million tonnes next year, resulting in a 18 million tonnes of shortage and raising the requirement for imports.

This year, the Middle East and North Africa region imported around 18 million tonnes of finished long and flat steel whilst in 2008, 20 million tonnes this year was imported.

Middle East exporters

With the UAE and Saudi Arabia being the region's largest importers, it is the Ukraine and Turkey that export the most steel to MENA. As such, Matta said local producers are facing fierce competition due to the import prices."

"We have to be competitive to protect our market share. The price level in Egypt is one of the lowest in the region. Local producers have come together and taken action. They are going to pursue an anti-dumping case in relation to this surging imports."

The influx of steel from Turkey has been attributed to a slowdown in the pace of consumption growth in the second half of the year.

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