Steel consumption in Saudi Arabia has rapidly surged over the past few years on the back of construction boom, growing investment in real estate and cheap & reliable gas/energy supply, according to a new research report “Saudi Arabia Steel Industry Forecast to 2013” by companiesandmarkets.com. Economic growth has also contributed substantially to raise domestic steel consumption by accelerating business activities. In fact, the impact of economic slowdown on the real estate projects was minimal. Out of the total real estate projects worth $543 billion, mere 4 percent have been cancelled or delayed. Hence, all these factors have fueled the consumption of iron and steel in the Kingdom to reach around 14.8 million metric tons in 2009. At present, the steel industry in Saudi Arabia is highly import oriented, the report said. In 2008, the Kingdom imported around 6.3 million metric tons of steel which accounted for majority of domestic steel consumption. However, the situation is expected to reverse in future with the escalation of domestic production. The study forecast that the share of imported steel will see a downward trend in coming years as several major capacity expansion plans of manufacturers under pipeline. Saudi Arabia represents one of the fastest growing steel industries in the Middle East. Over the past few years, the rapid economic development has led to skyrocketing growth in the construction and infrastructure industry, which has boosted steel demand in the country and caught the attention of global steel giants. The research has also found the factors which will drive growth in Saudi Arabia's steel industry during the forecast period. The report has identified that increase real estate projects in different parts of the country are currently the key boosters, and this trend coupled with government initiatives will play a greater role in promoting reforms and increasing competitiveness.
