It is reported that traders in the Gulf region expect steel imports to Saudi Arabia and the UAE to drop significantly in 2009, in a context of increasing local steel production capacity and decreasing demand.
According to the traders, as a result of the slowing construction activity in the Gulf region, the decline in demand for steel is also expected to hit steel imports, as the global financial crisis continues to weigh on the real estate sector.
"In a few years Saudi Arabia will not have to import any steel," said Khalid Sulaiman, undersecretary at Saudi Arabia's Ministry of Trade and Industry.
Last year, Saudi Arabia imported about one million metric tons of steel, while demand for steel is expected to drop to 5.1 million metric tons in 2009 from 7.2 million in 2008, traders said.
On the other hand, according to steel traders in the Gulf region, the UAE imported 100,000 metric tons of steel in June, or a quarter of the import volume in the corresponding period of 2008.
"This was the plan all along, to become self-sufficient, and this is a good time to do this because this year demand is about 30 percent lower than last year due to the economic crisis," said a UAE steel trader.
There are no official bodies in the Gulf region, releasing monthly statistics on steel supply and demand levels, and so the majority of data is collected from traders in the sector.