The Cooperation Council for the Arab States of the Gulf (GCC), which includes Saudi Arabia,
Kuwait,
Bahrain,
Qatar, United Arab Emirates, and the Sultanate of
Oman, imported 14.3 million tons of steel in 2005. The figure is expected to reach 20 million tons per annum by 2008 if a conservative growth rate of 10 percent is maintained.
The seven GCC countries have launched many development projects in recent times, especially after the oil price increases of the past two to three years. High financial revenues can be singled out as a direct effect of the oil price increases but there are also other important consequences. For example, it makes economic sense for GCC countries to begin new developments and gas & oil projects when oil prices are high, and this is what the GCC countries did after the oil price increase of 2003.
However, the fact remains that the steel needs of the GCC countries are supplied mostly by external sources, such as
Turkey,
China, the
CIS countries and
Iran. The United Arab Emirates has a high annual domestic demand of 3.5 million tons due to the huge
construction projects being carried out there. Meanwhile, this small country, as the main free zone in the Persian Gulf usually facilitates the re-export of goods to other neighboring countries, in particular to
Iran. Of course, due to the high demand for steel in the Persian Gulf region, a lot of
UAE traders or stockers already have low stocks, a factor which may affect the market for
construction sections considerably.