SteelOrbis talked to Juma Al Mansouri, vice president of sales at UAE-based steelmaker Emirates Steel, about current market conditions and expectations.
Last year, when you answered our questions at the IREPAS conference in Warsaw, you said that in order to mitigate risks, you seek to diversify with value-added products, particularly in wire rod and steel section capabilities. Since then, have there been any changes in your capacity or your product range?
Emirates Steel continues to expand capabilities horizontally in long products, especially in wire rod, as the company has been busy developing different grades for welding, fasteners, cable armoring, etc.
How do you view steel demand in end-user industries in the Gulf region, especially in the construction industry?
The short-term view shows no growth in demand as the region has not overcome geopolitical issues and the lack of stability to enhance construction activities, apart from what is going on in Dubai to meet the EXPO 2020 requirements. The rest of the GCC countries have growth rates not exceeding 1.0-1.50 percent, while the Saudi market showed a slight improvement early this year, but still not to a point which would confirm a recovery. In short, the GCC construction markets will remain stable as oil prices support government expenditure.
What is the distribution of your domestic and export sales?
Overall, exports account for 15-18 percent of our total sales, with the domestic market accounting for the rest.
How did the Section 232 duties in the US and the import quotas in the EU affect your business? What are your alternative export markets?
Emirates Steel does not export rebar and wire rod to the US, only our steel section business has been affected. Our alternative markets are the Far East and Australia. In the EU there is still quota to be utilized.
What are your expectations for the rest of 2019?
We are pessimistic for the second half of 2019. Iron ore costs will lead big steel producers to halt their operations. Meanwhile, with the spread between scrap and iron ore narrowing down, iron ore has to show some correction.
Do you expect any disruptions in your iron ore supplies from Vale because of the dam collapse in Brazil?
No, I don’t think there will be any problem.
We know that you are collaborating with some other companies to support the local economy within the scope of Abu Dhabi Economic Vision 2030. Can you tell us about these collaborations?
Emirates Steel works under the umbrella of SENAAT which is owned by the Abu Dhabi government. All these companies from food stuffs to construction are working in parallel with the Abu Dhabi Economic Vision 2030.
Any final words for our readers?
Sustainability is the key to growth.