Reuters reported that the Gulf is no longer an easy market for steel exporters after the slump in real estate crushed demand even more steeply than on the global market. Industry participants said that in the Gulf, cooling off after the oil driven boom imports were expected to fall 20% this year, as billions of dollars of construction projects were put on hold or delayed.
Mr Steve Mackrell director of operations at the Iron and Steel Statistics Bureau said that “We have been hearing of all these project delays in the Gulf. There is no doubt that demand this year will drop. Gulf imports are expected to fall to 18.0 million tonnes this year from 22.5 million tonnes in 2008.”
Mr Hisham al-Hamili GM of steel products sales and marketing at Saudi Basic Industries Corporation said that in the largest Arab economy, Saudi Arabia, demand this year was expected to drop to 5.1 million tonnes from 7.2 million in 2008. Mr Hisham al-Hamili said that “This year in Saudi Arabia we have experienced a 26% drop in automobile manufacturing and a drop of 22% in construction which lead the drop in steel demand.”
In the UAE, the second largest Arab economy, demand for steel is expected to drop by 40% this year but its largest steel producer Emirates Steel has doubled output to 2 million tonnes this year. Mr Jim White the CEO of state owned Emirates Steel Industries said that “Demand has already fallen and has stabilized now,” adding that the demand would come in around 3.5 million tonnes in 2009 from around 5.5 million tonnes to 6.0 million tonnes in 2008.
As per report, cheap steel flooding in from Europe and Turkey as a result of weakening currencies could be a further blow for the Gulf steel market. Mr Faruk Ekinci vice president of Turkish manufacturer Ekinciler Iron and Steel said that “I expect that our exports will be more or less the same this year, because our prices are and will continue to be competitive.”