How will boycott of Qatar by seven Muslim countries affect steel industry?
Starting with Bahrain this morning and followed by Saudi Arabia, Egypt and the United Arab Emirates (BAE), and with the inclusion of Yemen, Libya and the Maldives in the coming hours, the cutting off of relations with Qatar by many neighboring countries is regarded as the greatest political crisis to hit the region in recent times, according to market sources.
As regards the steel industry, SteelOrbis has been informed by market sources that Qatar’s steel trade, both imports and exports, with the Gulf countries is expected to be affected negatively. Qatari steelmaker Qatar Steel has a wire rod mill in Dubai and for this mill the billets needed as feedstock are sent from Qatar to Dubai through Saudi Arabia. These deliveries are expected to cease due to the boycott. With this crisis, although it is not yet clear how the operations of this mill will be affected, it is predicted that Qatar Steel will be unable to procure the feedstock, namely billet, from Qatar and that it will have to buy billet instead from the UAE or from other markets.
On the other hand, Qatar has also been exporting rebar to Saudi Arabia, Yemen and Libya, and, although it is not yet clear how existing rebar deals will be affected, it is estimated that subsequent exports will be halted completely. This situation is also expected to create an opportunity for Turkish steel producers who sell rebar to the same regions.
However, market participants in the region believe that the necessary steps will be taken quickly to end this major crisis and that it will soon be overcome.
*This was published on SteelOrbis website on June 5, 2017.