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Discuss this article (0 Comments)A steal for steel
by Alison Luke on Saturday, 13 June 2009
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The slack demand for rebar on the Middle East market led Turkish mills to cut the exported rebar offer in late May, then offering rebar to the UAE for $470 per tonne.
"Recent strong demand for iron ore has been attributed to stockpiling in China, as local steel mills took advantage of the 40% decline in contract prices and cheaper shipping rates," explains the Davis Langdon spokesperson. "Some of the rise in imports was due to stronger seasonal demand for specialty steel products in the construction industry and new public infrastructure works.
"However, China's iron ore imports are likely to weaken in coming weeks amid signs of overcapacity in the steel industry," predicts Davis Langdon. "Seeking to curb the excess capacity, China has already directed commercial banks to limit or cancel loans to steel producers seeking to expand capacity," Davis Langdon reports.
During the initial downturn in the region's construction industry an excess of steel was available on the market as suppliers had previously increased production to meet the expected demand. As projects were cancelled or put on hold there was an inevitable over-supply. Much of this was consumed in other markets or exported, but not always for a profit. "A lot of companies lost a lot of money," reports the ESI spokesperson. "Some of [the steel] was bought for AED5500 per tonne and sold at AED1800 and we're talking about big volumes of perhaps 150,000 tonnes," stresses the spokesperson.
Market growth
Evidence of an upturn in the local steel market comes from the growth of some major firms in the sector. "There is some optimism among traders and suppliers," states the ESI spokesperson. "The market is now more stable and we are expecting an increment increase in price," they add.
In early June RAK Steel announced plans to increase its current annual 500,000 tonnes capacity of deformed steel reinforcement bars by 50% during 2009. The move is part of a strategy by the firm to meet gradual upturn in construction work in the emirate. RAK Steel has also unveiled plans to become an integrated steel mill and has commissioned preliminary planning to that effect.
"There has been a gradual resurgence in construction activities across the UAE, buoyed by the continued growth in tourism and residential development projects in all emirates," states RAK Steel CEO Ajay Aggarwal. "RAK Steel has accordingly received a marked increase in demand and now we are running to full capacity; this has been a key factor that has motivated us to push through with our expansion initiatives," he explains. The firm's primary market is currently the UAE, although it also exports products to Oman, Saudi, Bahrain, Qatar and Iran.
The firm is expecting a speedy recovery of the construction sector within the region. "In about two years we expect the construction market to get back to pre-2008 levels and thereafter maintain a growth trend of around 5% [per annum]," predicts Aggarwal. "Our expansion initiatives are part of Rakia's grand design to cope with the present and future demand of the construction sector and ultimately complement the development initiatives across different industries," adds Aggarwal.
Saudi Basic Industries Corporation (Sabic) has also announced plans for expansion, with an aim to more than triple its steel production capacity to 17 million tonnes by 2020. The increase will be made through acquisitions and the construction of new plants.
It seems that despite the global downturn the Middle East steel sector is set to continue growing, and the expansion plans of firms across GCC are a sure sign of confidence that such growth will materialise. And although in the short-term there may be some respite for construction firms with the availability and price of steel products, there is still some way to go before the supply meets demand should those mega projects that are on hold be restarted in the near future.
Top 6 Middle East steel firms
Emirates Steel Industries (ESI)
Emirates Steel Industries (ESI) is a wholly-owned government factory located in the Industrial City of Abu Dhabi (ICAD). It uses rolling mill technology to produce rebar for the construction industry.
Established in 2001, the mill currently operates at its full design capacity of 600,000 tonnes of rebar per year. It sells 100% of its products within the UAE.
ESI has achieved Quality System Certification from the UK Certification Authority and produces rebar conforming to BS4449/97 Grade 60 in sizes from 10m to 32mm, in lengths of 12m.
The firm is on a major expansion push to increase its rolling capacity and establish the factory as a fully integrated plant. www.esi-steel.com
Qatar Steel
Qatar Steel was formed in 1974 as one of the first integrated steel plants in the Arabian Gulf. Commercial production began in 1978 and the company became wholly owned by Industries Qatar in 2003. Qatar Steel now has a 707,000m² facility located in Mesaieed Industrial City, which includes a continuous casting plant and rolling mills with the latest automated technology. An adjacent 375,000m² plot is reserved for future developments. The firm also operates a UAE-based subsidiary to meet the growing demand for high-quality steel wire-rod products within the GCC. It operates two primary facilities at its 60,000m² Jebel Ali Free Zone site: an upgraded wire rod mill with an installed annual capacity of 240,000 metric tonnes and a rebar mill. www.qasco.com
RAK Steel
RAK Steel is a joint venture between Ras Al Khaimah Investment Authority and Middle East Traders group. The second largest rebar manufacturing mill in the UAE, it has a design capacity of 500,000 tonnes per year.
RAK Steel rebar are made from pure steel billets, hot rolled in a highly automatic rolling mill and subjected to an online thermo-mechanical treatment called Quenching and Self Tempering (QST). The mill produces: 8mm, 10mm, 12mm, 14mm, 16mm, 20mm, 25mm and 32mm diameter steel deformed reinforcement bars (rebars) to international British and American standards according to client requirements.
The firm is aiming to increase its capacity by 50% by the end of this year to cater to increased local demand. www.raksteel.com
Sabic Metals
Sabic is one of the largest and most profitable non-oil companies across the Middle East and one of the world's five largest petrochemicals manufacturers. It is a leading steel producer in the Middle East, and the firm's metals business has played a vital role in the construction, development and industrialisation of the region. A number of flat and long steel products are manufactured at its production facilities.
Sabic is a public company with its headquarters in Riyadh. The Saudi Arabian government owns 70% of its shares, while the remaining 30% are held by private investors across the GCC. www.sabic.com
United Gulf Steel
United Gulf Steel is one of the largest producers of medium section steel products in the GCC. It has a 450,000 tonnes per annum capacity facility located at Jubail Industrial City, Saudi Arabia.
An ISO 9001:2000 certified company, it manufactures medium section structural steel products. The firm's product range includes a wide variety of structural steel such as IPE beams; UPE channels; equal angles; flat, square and round bars in various sizes.
The rolling mill can produce structure steel within close tolerances and with the required mechanical properties, and cater to stringent requirements for critical applications. www.ugsteelmill.com
Zamil Steel
Zamil Steel Structural Steel Division is one of the largest steel fabricators in the GCC. The firm fabricates steel structures and plate works for a number of applications including high-rise buildings, with products including structural steel, pipe racks, ducting and equipment support structures.
Saudi Arabia-based Zamil has achieved ISO 9001:2000 certification for its quality systems, plus ISO 14001 & OHSAS 18001 certifications, which have resulted in the improvements of process efficiencies and workforce safety. The Zamil Structural Steel Division is also certified by the American Society of Mechanical Engineers. www.zamilsteel.com
Emirates Steel Industries (ESI)
Emirates Steel Industries (ESI) is a wholly-owned government factory located in the Industrial City of Abu Dhabi (ICAD). It uses rolling mill technology to produce rebar for the construction industry.
Established in 2001, the mill currently operates at its full design capacity of 600,000 tonnes of rebar per year. It sells 100% of its products within the UAE.
ESI has achieved Quality System Certification from the UK Certification Authority and produces rebar conforming to BS4449/97 Grade 60 in sizes from 10m to 32mm, in lengths of 12m.
The firm is on a major expansion push to increase its rolling capacity and establish the factory as a fully integrated plant. www.esi-steel.com
Qatar Steel
Qatar Steel was formed in 1974 as one of the first integrated steel plants in the Arabian Gulf. Commercial production began in 1978 and the company became wholly owned by Industries Qatar in 2003. Qatar Steel now has a 707,000m² facility located in Mesaieed Industrial City, which includes a continuous casting plant and rolling mills with the latest automated technology. An adjacent 375,000m² plot is reserved for future developments. The firm also operates a UAE-based subsidiary to meet the growing demand for high-quality steel wire-rod products within the GCC. It operates two primary facilities at its 60,000m² Jebel Ali Free Zone site: an upgraded wire rod mill with an installed annual capacity of 240,000 metric tonnes and a rebar mill. www.qasco.com
RAK Steel
RAK Steel is a joint venture between Ras Al Khaimah Investment Authority and Middle East Traders group. The second largest rebar manufacturing mill in the UAE, it has a design capacity of 500,000 tonnes per year.
RAK Steel rebar are made from pure steel billets, hot rolled in a highly automatic rolling mill and subjected to an online thermo-mechanical treatment called Quenching and Self Tempering (QST). The mill produces: 8mm, 10mm, 12mm, 14mm, 16mm, 20mm, 25mm and 32mm diameter steel deformed reinforcement bars (rebars) to international British and American standards according to client requirements.
The firm is aiming to increase its capacity by 50% by the end of this year to cater to increased local demand. www.raksteel.com
Sabic Metals
Sabic is one of the largest and most profitable non-oil companies across the Middle East and one of the world's five largest petrochemicals manufacturers. It is a leading steel producer in the Middle East, and the firm's metals business has played a vital role in the construction, development and industrialisation of the region. A number of flat and long steel products are manufactured at its production facilities.
Sabic is a public company with its headquarters in Riyadh. The Saudi Arabian government owns 70% of its shares, while the remaining 30% are held by private investors across the GCC. www.sabic.com
United Gulf Steel
United Gulf Steel is one of the largest producers of medium section steel products in the GCC. It has a 450,000 tonnes per annum capacity facility located at Jubail Industrial City, Saudi Arabia.
An ISO 9001:2000 certified company, it manufactures medium section structural steel products. The firm's product range includes a wide variety of structural steel such as IPE beams; UPE channels; equal angles; flat, square and round bars in various sizes.
The rolling mill can produce structure steel within close tolerances and with the required mechanical properties, and cater to stringent requirements for critical applications. www.ugsteelmill.com
Zamil Steel
Zamil Steel Structural Steel Division is one of the largest steel fabricators in the GCC. The firm fabricates steel structures and plate works for a number of applications including high-rise buildings, with products including structural steel, pipe racks, ducting and equipment support structures.
Saudi Arabia-based Zamil has achieved ISO 9001:2000 certification for its quality systems, plus ISO 14001 & OHSAS 18001 certifications, which have resulted in the improvements of process efficiencies and workforce safety. The Zamil Structural Steel Division is also certified by the American Society of Mechanical Engineers. www.zamilsteel.com
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