In the second part of session two at the SteelOrbis Fall '09 Conference and 61st IREPAS meeting, Vikram Bhatia, CEO of Alam Steel Ltd, focused on the current state of the GCC steel market (Cooperation Council for the Arab States of the Gulf) and where it is headed, based on his company's perspective of the market with almost 600 clients in the region across many industrial sectors. Accordingly, Mr. Bhatia said that estimated GCC demand for steel for 2010 is 20-22 million mt, down from the earlier approximate prediction of 28 million mt. He stated that 70 percent of total steel consumed in the region is sold via distributors or processors (distributors that have their own processing lines). According to Mr. Bhatia, this figure means that distributors sell over 15 million mt annually and play a vital role within the steel supply chain in the region.
The speaker went on to remark that Deloitte ME has reported that GCC steel consumption will fall 20 percent this year, whereas UAE steel consumption is down almost 50 percent year on year. While it is estimated that steel consumption in Abu Dhabi may follow a flat trend, Dubai may register a drop of 50 percent. Iraq, Iran and North Africa are growing markets; however, there are significant business challenges and high barriers facing entry to these markets.
There are some negative factors threatening steel trade in the UAE, Mr. Bhatia said, citing the oversupply in both residential and commercial buildings, adding that an expected 22,400 residential units are to be delivered this year. In this context, many residential projects are being put on hold or cancelled. This will take time to resolve, he said. On the other hand, there are some opportunities in the UAE, he believes. For example, speculators are out of the market and Abu Dhabi seems as the new engine of UAE steel consumption.
In addition, Mr. Bhatia stated that the Saudi Arabian market shows positive signs as regards rebar demand, with the upgrading of airports across the kingdom. Meanwhile, there are also infrastructure works for religious tourism and the government is trying to stimulate the economy. Regarding Qatar, the IMF predicts 11.5 percent growth for this year, while Mr. Bhatia estimated that Qatari rebar consumption would reach 1.35 million mt in 2009. He ended his presentation by saying that oil prices are still the key for the GCC GDP figures.