The 50th annual meeting of worldsteel (World Steel Association) held in Dubai on October 10-11 hosted a panel discussion on the Middle East and North Africa (MENA) region. The discussion chaired by T.V. Narendran, worldsteel economics committee chairman and managing director of India-based Tata Steel, included the participation of Abdulaziz Al-Humaid, executive vice president metals at SABIC (Saudi Basic Industries Corporation) as well as chairman of SABIC subsidiary Saudi Iron & Steel Company (Hadeed), Saeed Ghumran Al Remeithi, CEO of Emirates Steel, George Matta, marketing director of Egypt-based Ezz Steel, and Dr. Bahram Sobhani, managing director of Iranian steelmaker Mobarakeh Steel Company.
Mr. Al-Humaid began by pointing out that SABIC was the fourth-largest petrochemical company in the world, while steel represents 10 percent of the company’s business. He remarked that after 2008 a lot of small producers in the region were not able to survive and exited the business.
Mr. Al Remeithi of Emirates Steel said that oil prices were a factor in the reduction of spending in the GCC countries, but were not the main reason. As regards the UAE, he said that the private sector should step in, emphasizing that it has always been the aim of the government in the UAE to support the private sector with incentives so that it will step in and increase investment.
As regards the current levels of oil prices and what they mean for development in the region, Hadeed chairman Al-Humaid said that the GCC region has previously known ups and downs. He also pointed out that the region has seen oil prices at $18 a barrel in the past and so in his view the current level of around $51 a barrel will not stop development in the region. He said he expects to see strong demand for steel in 2017 and 2018 and so he is very optimistic. In passing, he mentioned that the region’s seamless pipe capacities were doing fine and would survive.
Describing the prospects for Egypt, George Matta was upbeat, referring to the country’s large population and strong government spending, stating that the country would have strong demand for rebar in the long term, with Egypt expected to grow at an average of 5.1 percent per year. GDP growth of 4.2 percent in 2015 was double that of previous years - the result of increased stability, he said, while Egypt’s plans for a new capital city east of Cairo as well as development plans for the Suez zone will also have a strong positive impact on Egyptian steel demand, he added. On the downside, at present there is an energy shortage in the country, there have been foreign currency availability issues in Egypt, its export volumes are low and its demand for flats has declined. However, he said, the situation is expected to improve as the country’s natural gas supply normalizes. He went on to state that the Egyptian steel industry is suffering at the present time, as steel import volumes had increased by around fivefold since 2013, while there was also slow growth in steel capacity. Next year will see a positive development with the shift in gas supply from power generation to steel, while Egypt is expected to become self-sufficient in natural gas in the coming years, which is good news for its steel industry.
In answer to a question on whether there are any plans for new steel plants in the GCC, Mr. Al Remeithi said that in the future there may be room for new flat steel capacities.
Regarding Iran, Dr. Sobhani of Mobarakeh Steel said there have been improvements since the nuclear deal. He also pointed out that the country has all the advantages needed for steel production - all the available raw materials, energy sources and technology. While Iran’s GDP indicated a decrease of two percent three years ago, an increase of six percent is predicted for the coming year, he said. He added that the country’s steel demand is foreseen to be around 19 million metric tons for the current year, while Iran is aiming to raise its steel production capacity to 55 million metric tons by 2025. He also referred to demographics in Iran where the population is foreseen to rise to 90-95 million by 2025, which would help drive steel demand and steel production.
Looking south towards the rest of the African continent apart from North Africa, Mr. Al-Humaid stated that he saw high potential in the rest of the continent and that he was very optimistic for the region.