Mena steel demand to top 70m tonnes
Dubai, December 5, 2012
Steel demand in the Middle East and North Africa (Mena) region could reach a new height of 70 million metric tonnes by 2020, assuming an average annual growth of 10 per cent, a study said.
The long-term outlook for the steel industry in the Mena, particularly in the GCC, is very promising due to ambitious economic development plans by the governments, said the Frost & Sullivan report.
Major projects planned in the automotive, railway, economic and industrial cities, petrochemicals, real estate, etc., would drive the steel industry’s growth, it said.
Investments in ambitious projects by both public and private sectors, increased government expenditures (supported by their fiscal surpluses), population growth, the shrinking of family size and resulting demand for new homes, industrialisation and localisation movements, etc. are set to fuel solid growth of the region’s steel market, and thus, the steel industry is expected to continue its good performance, the report said.
Middle East steel demand was 27.3 million MT in 2010, production was approximately 20 million MT, and the balance was met by imports.
Net imports of iron and steel products into the GCC countries reached $8 billion value in 2011, the report said.
The two major steel production hubs in the Mena have historically been Iran and Egypt, but there has been shift in the industry with the GCC countries emerging as the leading steel producers.
The major raw material source for steel production in the region has been gas-based Direct Reduced Iron (DRI) due to availability of competitive natural gas in the region. According to Frost & Sullivan, DRI production in Mena accounts for about one-third of the global production.
The fairly high ranking of GCC countries among 185 economies on the Ease of Doing Business report by IFC and the World Bank are likely to contribute to their being a good platform for international and local steel companies to expand operations, it said. - TradeArabia News Service