Middle East steel companies expect demand in the Gulf region, a major consumer, may drop as much as 30 percent in 2009 due to the global economic slowdown, but a need for housing could cushion the fall. Several producers and traders at a steel conference in Dubai on Wednesday portrayed a gloomy picture for consumption prospects in 2009, with some predicting further output cutbacks and expansion plans being put on hold. But a massive shortage of housing and infrastructure in the rapidly-developing region could limit the slide in demand and prices. “It will be a very challenging year,” said Ali Hassan Al-Muraikhi, manager at the commercial division at Qatar Steel, a unit of Industries Qatar. He said that demand is declining and the fall will be in the range 30 percent in 2009 due to global financial problems and falling oil prices. “Most of the mills in the region have to consider cutting production,” he added. Steelmakers in Europe and the US cut output sharply in the last couple of months due to the rapid deterioration in steel consumption. Ezz Steel, Egypt's largest steel producer, recently reduced output. George Matta, chief marketing officer at Ezz, said the company was adjusting production to match weaker consumption. “The steel industry is no doubt going through turbulent times,” he said, adding he expected rebar, billet and scrap prices to remain depressed until the first quarter of 2009.