Steel demand in the MENA region, especially in the GCC countries, has been improving this year, unlike other international markets. The CEOs of regional steel producers discussed the main developments and risks in the MENA during the keynote panel at the Fastmarkets Middle East Iron & Steel Conference held in Dubai this week.
Steel demand in the Middle East is expected to increase by five percent in 2024 to 56.9 million mt and it will post a further growth of 3.2 percent in 2025, which is showing the growing tendency in the industry, the rising attractiveness of the region in terms of sales, and the development of local steel production. At the same time, consumption in African countries in 2024 will increase by 4.8 percent year on year to 37.1 million mt.
However, Saeed Al Ghafri, CEO of Emirates Steel, part of Emsteel, said, “Our focus is on innovation for sustainability, not direct investments in new capacities. How can we develop in the current conditions? We are in a new era of green steel, having the pilot plant using hydrogen. Secondly, it is important to collaborate with energy providers with the aim to use 80-85 percent of clean energy to produce steel.” He also noted that Emirates Steel has achieved carbon capture totaling 800 mt of CO2, being among the first in the world to do so.
Sharing a similar view, Sharjeel Azhar, CEO of Saudi-based Al-Ittefaq Steel Products Company, stated, “Saudi Arabia launched the carbon market. All of us steel producers are heading in the direction of clean steel, but we want to be commercially reliable as well. Companies developing green steel will benefit two or three years ahead."
The question of the impact of Trump winning the presidential elections in the US was also among the hot topics being discussed. Even though most mills in the MENA region do not foresee a direct impact, “putting tariffs on everything from China by the US will affect China, so it will impact the world. So, the world will be responding. We need to protect our markets,” said Hassan El Marakby, CEO of Egypt-based Al Marakby. Also, in terms of other effects, Rewant Ruia, a member of the founding family of Essar, said that Trump can make changes in energy prices, making the US more competitive in metallics, bringing more affordable energy and potentially increasing the exports of energy. Essar has a DR-pellet plant of 7 million mt per year, which is planned to be commissioned in the first quarter of 2026. Also, there is a plan for a four million mt green steel plant in Saudi Arabia.
Among the major challenges and risks the MENA-based steel producers are facing are oversupply and a lack of supply of premium raw materials for clean steel production. “The biggest risk we see is the oversupply in the long steel market. But it will start to reverse as we [Saudi Arabia] have major investments, which will be implemented in time, so the steel demand profile will improve,” the CEO of Al-Ittefaq Steel said. Hassan El Marakby agreed about the main risks, adding that, though demand in Egypt is more or less satisfying, oversupply in the finished steel market is increasing. “We [MENA steel producers] have the advantage in DRI. But high-grade iron ore is greatly needed. If China wants to export, the mills there will also look for higher-grade raw materials. As a result, we all may face a shortage of higher-grade iron ore,” the CEO of Emirates Steel said.