At the first session of the SteelOrbis Spring '10 Conference and 62nd IREPAS meeting, Saudi Arabian billet producer SULB National Company's CEO Faisal Haddawi said that, with its growing population, the Middle East region is now emerging as a strong competitor in the steel industry. In addition to government-backed projects in the region, he said private investors have also been investing heavily in steel capacities, which will contribute to the recognition of the region as a steel industry hub in the coming years, and not just as a center for the petroleum industry.
Noting that the Middle East, which currently has an annual crude steel production capacity of 16.5 million mt and a yearly DRI output of 14 million mt, has increased its steel production capacity by 1,253 percent between the years 1980 and 2009, Mr. Haddawi underlined that investing in the steel industry in the region is quite attractive due to the lower energy prices and labor costs, along with the low duty rate for steel products. According to the data presented by the SULB CEO, for 2010 finished steel consumption in the region is expected to reach 30 million metric tons, while the region's annual finished steel production is forecast at 23 million mt. Unable to satisfy its own finished steel demand, the Middle East is a net importer of steel and, due to the characteristics of investments in the region, long product capacity accounts for 85 percent of total steel capacity.
Mr. Haddawi predicted that demand in the region would continue to rise thanks to population growth and ongoing infrastructure projects.
The SULB CEO suggested that it is a good solution for struggling independents to form partnerships with either state-owned steel producers or established global players from outside the Middle East, whether by giving state-owned companies a share of equity or aiming at high value-added steel production with global steel companies.