Sundeep Rao, director of Oman-based Sohar Steel, which produces rebars, coated rebars and weld mesh, has answered SteelOrbis' questions regarding the market outlook and Sohar Steel's operations.
What is the situation regarding Sohar Steel's meltshop upgrade project? Are you planning to import steel billet in the future?
Our meltshop upgrade will be completed by the end of 2013. After the upgrade of 500,000 mt per year, the total capacity will reach 700-750,000 mt per year. The meltshop can also be fed by DRI and HBI. We are using all raw materials at present: scrap, HBI and DRI. We are awaiting approval from the government for gas availability for our future DRI plant project.
Our plans for importing billet depend on the market situation and demand. It is too soon to say anything on the matter. We will certainly run our billet production at full capacity and will continue to produce rebar. At present, the capacity of our melting plant is 330,000 mt and the capacity of our rolling mill is 320,000 mt. The future melting capacity will be 700-750,000 mt after the upgrade and we will add a new rolling mill with an annual production capacity of 700,000 mt. So our total rolling capacity will be approximately one million mt per year. However, it is the market which will tell us how much of this capacity will be used. The meltshop upgrade will definitely be a new step forward for the Omani long steel market.
How do you supply scrap, from which markets?
We have been buying scrap from the local market, Europe and the US. And at present we opt to import scrap in containers. However, we are planning also to import scrap by bulk shipments in the future. There is no duty on import of raw materials and we will import scrap and billet in line with our requirements in future.
What is the demand situation in Oman for your products? What is the situation regarding infrastructure projects in Oman?
Annual demand for rebars in Oman is approximately 800,000 mt according to the 2013 figures. We expect to export approximately 30 percent of our production, i.e., around 200,000 mt, to other GCC markets. The GCC market, excepting the UAE, will witness an annual rebar consumption growth rate of eight to 10 percent in the foreseeable future.