GCC spending $18bn to plug steel supply gap

STEEL SHORTFALL: GCC countries are investing $18 billion to build 46 new steel plants as part of an effort to plug a steel supply gap. (Getty Images)

GCC countries are investing $18 billion to build 46 new steel plants as part of an effort to plug a supply gap threatening Gulf production, according to organisers of a regional manufacturing exhibition.

The investment comes as demand for building materials needed to fuel the region’s booming construction industry has skyrocketed, with the soaring price of steel and cement threatening to derail major projects.

"In the race to plug the supply gap a swathe of new steel plant projects as well as expansions to existing plants have been unveiled across the region with huge potential business opportunities for industry stakeholders," Spencer Felix, exhibition manager of the Middle East Manufacturing Exhibition (Memex), said in a statement.

"While there is talk of a slowdown in other parts of the world, the growth in the Middle East manufacturing base continues to expand with demand for steel far outstripping supply."

Saudi Arabia and the UAE lead the way with the two planning 17 and 16 new steel manufacturing plants respectively, the values of which range from $15 million up to $2 billion for each project, according to research by Proleads cited by the organisers.

Oman has six steel plants on the books, Bahrain four and Qatar three, organisers said.

Saudi’s largest project is an integrated complex of steel factories which will churn out 500,000 tonnes per year of railway track, three million tonnes of iron and steel processing and 800,000 tonnes of pipeline.

Memex will take place at the Abu Dhabi National Exhibition Centre from November 23 to 25. Industryscape, a dedicated trade show for industrial, manufacturing and production real estate, will also run parallel with this year’s exhibition.

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