Arab News reported that, with expanding pipeline network boosting the GCC's pipe industry, demand for steel across the region is set for a six fold growth in the next 5 years.
This message was given at the conclusion of TeknoTube Arabia 2011, the 10th International Trade Fair for Industrial Machinery, Metalworking, Machine Tools, Dies/Molds, Tubes, and Pipes.
The show urged the Gulf's tubes, pipes and steel industries to enhance cooperation in logistic operations, human resources development and boost the competitive abilities of their products in the international markets. It will help increase cooperation between GCC nations and help them avoid harmful competition, especially during times of crisis and low demand.
The Middle East steel market stands at a crossroads. For the first time in the region's industrial history, steel production is coming close to meeting domestic demand. With the ramping up of production capacities in the UAE, Saudi Arabia, Egypt and Oman, steel users and fabricators now don’t have to rely much on imports from other regions.
With regard to seamless piping that is used heavily by the oil and gas sectors, JESCO in Saudi Arabia plans to produce 200,000 tonnes in 2011, with a total rolling and finishing capacity of 400,000 tonnes. Another major regional player, Al Jazeera Steel Products of Oman, has recently upped production capacity to 300,000 tonnes per year. With OCTG pipe consumption in the Middle East projected to be 1.2 million tonnes in 2011, these companies will play a significant role.
Other players like Zamil Industries and Al Mansoori from Saudi Arabia have 170,000 tonnes of finishing capacity. ArcelorMittal's new seamless mill project in Saudi Arabia, with a capacity of 600,000 tonnes, is projected to start sometime in late 2012. However, imports from China, India and Europe will still account for more than 30% of tube and pipe consumption in the GCC region in 2011.
Mr Satish Khanna GM of Fajer Information and Services said that "The Gulf has the largest concentration of energy resources in the world, with oil producing countries in the region estimated to have spent approximately AED 182.5 billion to increase their current oil production or on new explorations by the year end."
He added that "The global demand for energy, infrastructure development, construction projects, water and air conditioning supply and automobiles, the key sectors that drive the tube and pipe industry, will continue to grow in the coming years."
Mr Khanna said that "GCC steel imports are in the region of USD 8 billion, growing at 20% CAGR. Steel represents a large portion of the GCC's base metals industry, and there will be a production shortfall of 14 million tonnes by 2015. The value of the projects planned and under way in Iraq soared by 12.3% to reach USD 182.6 billion."
As far as the tube industry is concerned, the Middle East has witnessed the launch of a series of new tubes plants one of which is the Empower Logstor Insulated Pipes Systems, the UAE's largest pre insulated pipe manufacturing facility, in Jebel Ali.
Mr Khanna said that "As for the tube industry, the GCC and Middle East are proving to be increasingly attractive markets for international tube manufacturers. Some of the growth sectors include oil and gas technology, petrochemicals, water and electricity supply, drainage as well as construction. Huge investments by the government as well as private sector have been made in this sector and more are in the pipeline."
He added that "The present demand from Gulf countries for pipes and tubes is met through imports; however leading manufacturers of steel pipes and tubes in the Gulf region are looking at reducing the imports as much as possible through the production of millions of tons of tubes and pipes every year."
Tekno Tube Arabia 2011, which attracted a cross section of the world's tube and pipe customers, is the oldest show in the region and is regarded as the ideal gateway to the extremely important Gulf and Middle East markets. The event, which was running concurrently with ArabPlast, together attracted 18,680 visitors.