/Rusmet.ru, Victor Tarnavskiy/ Long products markets of Middle East and North Africa are keeping calm. The majority of Middle East traders do not import rebar and buy only small amounts to refill the stockpiles.
Turkish companies stopped the prices decrease by the end of May. Turkish rebar price, which amounted $550-560 per ton FOB, increased in the end of the month to about $560-570 per ton FOB. According to the manufacturers, the reason of the increase was the stop of the fall in scrap market. Turkish companies, having worked out raw materials stockpiles, gradually resume the purchases. The prices for scrap, which fell in two recent months by about $100 per ton, are to start growing in the nearest future.
Besides, rebar manufacturers obviously count on purchases volume growth due to even slight increase of their products prices. Finally, Middle East traders almost have not refill the stockpiles by means of import during 1.5 months and bought only small amounts of domestic products. At the same time the demand for construction steel from the regional contraction sector is rather big. Last year Egypt was the leader. Today it is KSA. According to local analysts, more than $80 bn will be invested into KSA construction sector till 2015. Oil prices today are rather stable and are unlikely to go down soon. Thus, it can be expected that Middle East consumers will resume long products import in order to refill the stockpiles.
Nevertheless, Middle East market today needs much fewer products that it needed before the crisis. The reason is not only the demand decrease, but also domestic output expansion. In KSA in Jan.-Apr. 2010 almost 1.8 tons of steel were produced, which was up 31% on the same period of 2009 and up 5.8% on the same period of 2008. Qatar has increased the output by 84.8% and 38.1%. UAE does not provide its data to World Steel Association. However, it is well known that in 2010 the Hamriyah Steel mill (1 mio tons a year) started and Emirates Steel Industries terminated another step of its expanding program. In UAE, KSA, Oman, and Iran more than ten steel mills construction projects were announced or are being implemented. The region grows less import-dependent.
The statistics shows that Turkish steel supplies volumes to North Africa and Middle East countries in Jan.-Apr. 2010 amounted 3.27 mio tons, which were down 30% below the same period of 2009. Rebar import decreased by 62.3% to 1.21 mio tons. Among the main buyers only UAE and KSA, where acute deficit for steel products existed in March, increased the purchases volumes. Other countries cut the purchases volumes. The region share in Turkish export decreased from about 70% in the first four months of 2009 to 61%. Turkish companies offer their products to North and Latin America countries, South-East Asia, tropical Africa, and even Europe. The demand for steel in Middle East grows, but the import decreases. This process will obviously continue in the nearest years.