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Kingdom, UAE steel plants to meet demand
Published in The Saudi Gazette on 14 - 07 - 2009

Steel imports to Saudi Arabia and the United Arab Emirates are expected to drop dramatically this year as the two Arab countries' local industries come closer to meeting demand, traders said on Sunday.
A decline in demand for steel as a construction boom in the Gulf came to a halt was also expected to hit imports of the metal as the global financial crisis continued to weigh on the property sector, said the traders, who did not want to be named because they are not authorized to speak to the media.
“In a few years Saudi will not have to import any steel,” said Khaled Suleiman, an undersecretary at Saudi Arabia's Ministry of Trade and Industry.
Last year the Kingdom imported just under 1 million tons of steel while demand for steel is expected to drop to 5.1 million tons from 7.2 million in 2008, traders said.
There are no official bodies in the Gulf region that publish monthly statistics on steel supply and demand levels, and the majority of data is collected from traders in the sector.
In the UAE, steel imports in June stood at 100,000 tons, or a quarter of their level in the corresponding period in 2008, steel traders in the Gulf region told the news agency Reuters.
“This was the plan all along, to become self sufficient and this is a good time to do this because this year demand is about 30 percent lower than last year due to the economic crisis,” said a UAE steel trader.
Increased production mainly from state-run Emirates Steel Industries and other manufacturers in the northern region of the UAE were behind the drop in imports, one trader said.
Emirates Steel said last month its output had risen to two million tons per year from 650,000 tons in 2008.
The company plans to spend AED6 billion ($1.63 billion) for the second phase of an expansion plan that would take its capacity to three million tons per year.
Ras Al-Khaimah Steel, which came on line with a capacity of 500,000 tons per year in January, is among several plants that started production this year.
Saudi Arabia, the largest Arab economy, granted a number of steel producers export licenses last week after lifting a ban imposed on exports last year when a construction boom sent demand and prices soaring.
“Lifting the ban is an indication that Saudi is starting to meet the demand of the local market and therefore is now in a position to export the excess supply,” said a Saudi based steel trader. “For the first time in many years local supply has caught up with demand.”
Overall Gulf imports are expected to fall to 18 million tons this year from 22.5 million tons in 2008, according to a report from the Iron and Steel Statistics Bureau (ISSB) in London.
Meanwhile, Saudi Arabia awarded nearly $21 billion in oil and gas deals in the H1 of 2009, more than 20 times the value of hydrocarbon contracts in the final few months of 2008, the Saudi American Bank Group said earlier.
It said the surge was apparently a result of a decision by Saudi Aramco to retender key hydrocarbon projects that were to be awarded last year to take advantage of a steep decline in construction costs.
The oil and gas contacts account for less than a third of the total public investment deals awarded during the H1 of this year, reflecting a trend by to keep spending high.


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