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Middle East set for steel explosion

A MEPS (International) product story
Edited by the Engineeringtalk editorial team Nov 4, 2003

Although China continues to dominate the headlines in the world steel sector, the Middle East region is also growing fast, says a new report.

China continues to dominate the headlines in the world steel sector.

This means exciting developments elsewhere are being overlooked.

One such area is the Middle East which is also growing fast.

The latest publication from MEPS, "World steel outlook", forecasts production growth of 10% this year.

The region's output has more than doubled since 1992, and its steel consumption has grown at almost as fast a pace over this period.

Growth rates were more modest during much of the 1990s, but in the last few years a veritable boom has built up.

Huge investments are being poured into infrastructure projects in many countries of the area, and these will continue to drive steel demand upward for at least the next 24 months.

From the US $2.2 billion "intra-city train" planned in Dubai, to new water systems in Saudi Arabia and an expansion of the Bahrain aluminium smelter, building rates in many parts of the region are accelerating.

The United Arab Emirates is one focus of rising construction.

The country's steel demand is forecast to exceed 1.5Mt in 2003, up by 20% in the last three years, almost entirely because of the strong growth shown by the building sector.

Recent forecasts by the steel industry itself put Middle East demand growth at a comparatively modest 7% per annum for the next couple of years.

This may have to be revised upwards.

Iran - the region's biggest steel producer and consumer - is increasing at a rate of more than 10% per year.

This is without considering Iraq.

The billions of dollars that the USA is planning to pump into reconstruction work will see steel consumption increase dramatically in that country.

Some suppliers to the region reckon that as much as 3Mt will be needed.

So it is not surprising that projects to expand steel production are under way right across the region - from Libya in the west to Pakistan in the east.

Some of these are enlargements of existing works, while others are green-field installations.

Most ambitious is Iran: firm projects exist to raise crude steel output from 7.3Mt last year to 14.7Mt in the medium term and government officials are already contemplating 20 or even 25Mt.

Qasco in Qatar and Hadeed in Saudi Arabia are among the producers also planning expansion.

It is noteworthy that, while much of the additional capacity is in construction steel, some Middle Eastern mills are looking to produce other types including stainless strip, tinplate and alloy steel bars.

Steel companies from the region have also demonstrated an ability to take advantage of new opportunities as they arise - for example by acquiring the Sheerness plant in the UK and using it to produce billet for shipment to a bar mill in Saudi Arabia.

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