SteelOrbis talked to Sunil Kumar, Chief Marketing Officer of Jindal Shadeed, about their operations and the latest situation in the GCC market.
Can you tell our readers about your operations, including your product range and capacity details?
We currently produce 2.40 million mt of steel at Jindal Shadeed, of which about 1.40 million mt is sold as rebars and 1.0 million mt as round billets and square billets. We have also recently acquired Sohar Steel in Oman and are in the process of ramping up production starting with the restart of the rebar rolling mill with a capacity of about 40,000 mt per month.
How do you see the demand situation in the GCC market for both billet and rebar?
After Ramadan at the end of April, we saw some stability in the market demand in both the UAE and Oman with an improved offtake reported in May relative to April. However, demand sentiment in Saudi Arabia is rather weak currently and is only expected to revive in the second half 2023 once the demand from major projects materializes.
How do you foresee the future price trend for semis and longs?
We have seen price reductions in the international markets for both semis and longs since the middle of March, and, based on the recent trend, it seems that we are approaching close to the bottom and it is expected that prices should stabilize at around the current levels. However, the main determinant of the future price trend will be the restocking/buying demand in the main markets.
We see that Asia is becoming a major sales outlet for GCC-based long product suppliers. What can you tell us about the competition in the export markets? And how do you explain the change in market dynamics?
A large portion of the increase in sales by GCC players is due to lower sales from Turkey into Asia, and also due to the reduction in ocean freight charges and the relative cost advantage of GCC players based on DRI/EAF production.
With alternative origins being offered in the GCC billet market, what is your comment on the current situation in terms of imports into the region?
The main import offers into the region for billets are from Iran and we have seen the volumes continue to grow in the market and the offers have been fairly regular to the market.
How do you think the mega projects in Saudi Arabia will affect steel demand in the region?
The mega projects will definitely increase steel consumption in the region as all the projects are steel-intensive in nature and will have a significant pull on demand for the next five to ten years. However, we have yet to see any significant buying for these projects. We only expect to see buying demand from the second half 2023.
Do you have any investment plans, especially to reduce carbon emissions?
We are actively evaluating options for carbon capture in the short term at our operations. In the long term, there are plans under study currently for converting part of the DRI production to green hydrogen, supported by solar and wind power.
What are your expectations for 2023?
Overall, we expect prices to stabilize in the months ahead and we also expect some restocking demand in the third and fourth quarters of 2023.