Haddawi: Investment in crude steel rather than in rolling capacities essential for Middle East

Thursday, 24 June 2010 15:32:14 (GMT+3)   |  
       

What is the current status of your mill? Has construction started?

The site of 368,000 square meters has been developed, including the construction of the boundary wall. Also, the steel structures for the main buildings have been ordered through a well-known company in Ras Al-Khayma, UAE called Mabani Steel. Delivery will be started within the next two to three months. Work is currently being carried out on the foundations. Also, infrastructure construction started two months back.

How many tons of billet are you aiming to produce annually?

In phase 1, we are aiming to produce 300,000 tons per year. The plant is very flexible and capable of producing mild steel and stainless steel square billet in sizes of 100 x 100 mm to 200 x 200 mm as well as round billet in a range of 100-180 mm. This plant will be the first of its type in the GCC to produce stainless steel and round billet.

What are the qualities and characteristics of the induction furnace?

ABP Germany is the supplier of the induction furnace. It will be the largest in the world used to produce steel billet. 3 x 35 ton furnaces with 2 x 18 MW transformers will be easily capable of reaching and exceeding the targeted production of 300,000 tons. We also have a ladle refining furnace (LRF) and argon oxygen decarburization (AOD). With such technology and systems, the production of high quality products is a must.

On which raw materials are you going to base your production?

Since we have our own scrap processing facilities since 2006, our scrap networking is very strong. Scrap is the main raw material. We might need DRI or HBI to compensate for scrap shortages, if any.

What is the approximate billet requirement in Saudi Arabia per annum?

The annual billet requirement in Saudi Arabia is roughly about seven million tons.

How do you see the current situation in the Saudi Arabian billet market?

Only three big companies produce billet for their own use, with their output volume reaching 5.5 million tons. The shortfall of 1.5 million tons is covered by imports from Turkey, Ukraine, Russia and China.

Which markets are you planning to supply?

For mild steel billet we are targeting the local Saudi market. As regards stainless steel and round billet, we are going to export.

What will be your advantages in exports to neighboring countries?

Excellent supply chain management can be provided for our potential clients, namely, rolling mills. We will be one of very few set-ups in the GCC and among Arab producers overall to sell billet.
 
In view of the investments in steel production, when do you expect the Middle East to become self-sufficient in terms of meeting regional steel demand?

The Middle East might become self-sufficient in rolling capacities only (for rebar, wire rod, sections) within the next decade. But the real challenge is crude steel. So far, no iron ore mines have been discovered, excluding the Iranian mines. In addition, scrap generation is not sufficient to cope with demand.

How do you think the weakness in the supply chain in the region can be overcome?

It can be overcome by further mergers and acquisitions, in addition to support from governments, and also by investment in crude steel production rather than in just rolling capacities. Iron ore mining is the future for this industry in the Middle East.

Do you have plans to expand your product range in the near future?

Yes. We are targeting further expansion by setting up a DRI plant. However, this is a future strategic task which is highly dependent on the availability of natural resources.

How do you expect steel prices to trend through the end of the year? What is the likelihood of a demand recovery in the Middle East in the near future?

I think that no one can predict the trend of steel prices, especially given the frequent fluctuations seen during this year. The market is not stable, nor is the economy. We have seen what is going on in the European countries, principally in Greece, Spain, Italy and Portugal.

However, the Middle East might be a special case, like any Asian economy. Steel demand is booming mainly due to government infrastructure projects, and also due to the high demand from residential areas on the back of rapid population growth.


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