UAE partly adjusts longs production due to impact of Covid-19

Thursday, 02 April 2020 17:31:45 (GMT+3)   |   Istanbul

Similar to many countries globally which have been facing the negative consequences of the spread of the Covid-19 virus, the UAE has been also implementing restrictions, including temporary production adjustments. Some longs producers have decided to temporarily stop or slow down operations as a safety measure, while some continue rolling in their regular mode, SteelOrbis has learned.

In the rebar segment, some re-rollers have decided to take a production pause. According to sources, Conares stopped its 500,000 mt per year rebar rolling line at least two weeks ago, taking into account the unfavorable market and some governmental targets to reduce the labor exposure to the virus. The company has been selling rebar from stock. In addition, Union Iron & Steel, capable of around 400,000 mt per year rebar rolling, has been out of the market since April 1 for 15 days as a result of Covid-19. Some producers have decided to slow down operations. Hamriyah Steel has been operating 50 percent of its 1 million mt rebar capacity; the company produced 45,000 mt of rebar in March and intends to reach around the same figures for April based on its order book. UAE’s rebar market leader Emirates Steel Industries could not be reached by SteelOrbis by the time of publication. However, sources say that the company has also made some production adjustments. According to some market insiders, ESI is working at 75 percent rebar capacity with one rolling line stopped for maintenance.

In the wire rod segment, Fujairah-based United Steel Industries (USI) has decided to leave its operations idle for the time being, intending to sell from stocks for now until the quarantine is eased. The company, capable of 600,000 mt wire rod per year production, according to sources, stopped rolling over a month back in order to undergo some required maintenance and also due to the market weakening. Qatar Steel FZE operates its 10,000-15,000 mt per month wire rod line with no disruptions for now. In the meantime, local market leader Emirates Steel Industries, according to sources, has slowed down operations at its wire rod line and has been selling mainly from stocks.

It is worth mentioning that steel producers in Oman and Saudi Arabia have not yet announced any suspensions and continue their operations for now.

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