Conares, the second largest private steel manufacturer in the UAE, has initiated ‘Magnet’, a platform to discuss and disseminate insights on the steel industry.

The first edition of the ‘Magnet’ was held in Dubai, UAE, recently with participation of key industry stakeholders including Emirates Steel, Conares, Hamriyah Steel and Union Iron & Steel.

In the presence of a representative from the UAE Ministry of Economy as an observer, the meeting touched a range of key issues on the market such as rebar imports, market trends, product costing, promotion of local products and so on.

During the meeting, the local steel producers pointed out that despite the strict implementation of customs duty of five per cent on imports of steel rebar and wire rod, there was an upsurge of rebar imports in the UAE from non-GCC countries.

They emphasised that the UAE was the foremost importing country and targeted market within the region, as the emirates' imports of steel rebar were significantly higher than the other GCC countries.

On the event, Bharat Bhatia, the chief executive of Conares, said: "With directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, establishing the Industrial Coordination Council has been encouraging to reform the industrial footprint of the UAE."

"The Ministry of Economy, which also chairs the Industrial Council, had been immensely supportive in implementing the custom duty of five per cent on imports of steel rebar and wire rod, helping the local steel producers to offer their products with the best quality and on competitive prices," he noted.

"However, the rebar imports continue to create an imbalance to operate heavy industries, impacting economy of the region," stated Bhatia.

The UAE has a combined capacity to produce five million tonnes of steel rebar annually, which is more than sufficient to meet current demands of the country needing 3.5 to four million tonnes annually,” he added.

Bhatia said using local products was the way forward, since it spreads positive sentiments across.

“For example, steel is a key construction commodity. If all stakeholders in the construction industry promote using local rebar, it will endorse national industries which add to the country’s GDP and also create more job opportunities,” he noted.

Mohammed Salem Al Afari, the vice president (marketing) at Emirates Steel Industry, a subsidiary of Senaat, said: “All steel manufacturers in the UAE are facing the challenge with the inflow of cheap steel in the local market from Turkey, albeit the domestic steel mills have sufficient capacity to support the new wave of infrastructure developments planned up to 2020."

"If the traders only consider buying from local producers, the prices can be maintained competitively,"  stated Al Afari.

“If we compare prices of finished rebar product and raw product, the price gap is shrinking as it causes increase in production cost while diminishing the profit margin. This is in addition to the selling prices of rebar coming under pressure when the traders import cheap products predominantly from Turkey.” he added.

Dr Ramzi Al Halasa, the advisor and board director, Hamriyah Steel in Sharjah, said: “Our aim is to draw the government’s attention to this key issue happening in the UAE steel market. The announcement of major landmark projects across the country had signalled a boom in the steel industry, and the capacity and technologies to cater to this requirement are in place operational."

"But this positive indication is currently hindered by the flood of cheap steel in the local market imported from countries like Turkey and China," he added.

Omar Al Mashhour, the general manager, Union Iron & Steel Company in Abu Dhabi, said events such as these keep the steel market efficient in the UAE and help meet the domestic, regional demand, balancing the supply and demand equation.

"The market is promising in the next couple of years as we foresee a good demand for our products for the ongoing projects in the UAE, especially the projects related to infrastructure development to host the World Expo 2020 in Dubai and the Fifa World Cup 2022 in Qatar," he noted.  

Construction companies, developers and traders need to turn to the locally-manufactured, labelled as ‘Made in UAE’ steel products since these are more reliable than imports that usually take minimum of 30 days to arrive in the UAE.
 
Addressing the gathering, a Ministry of Economy representative said the government had taken several  key decisions on their recommendation to encourage the usage of Made in UAE steel products and also  promote the industrial sector that will eventually contribute to the growth of UAE economy.-TradeArabia News Service