GCC Steel Production to Reach 23.1 Million Tons by End of 2015

---

Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Driven by rising infrastructure spending flowing from high oil prices, the Gulf Cooperation Council (GCC) has made a year-over-year increase of 4.1 million tons in steel production capacity in 2012.

Ahmed Al-Ansari, the commercial division manager of Qatar Steel (Messieed, Qatar), said at the Steel Orbis Spring 2012 conference in London that total annual production capacity had reached 20 million tons and that total construction steel capacity was 7 million tons. Steel production in the region is expected to reach 23.1 million tons by the end of 2015. This total would cover 17 million tons of rebar production, 3.5 million tons of steel section, and 2.6 million tons of wire rod production capacity.

In 2012, annual rebar demand in the GCC is expected to total 12.6 million tons with demand for wire rod reaching about 2.1 million tons. Rebar demand in the region is expected to reach 13.3 million tons in 2013; 14 million tons in 2014; and 14.7 million tons by the end of 2015. With new capacity additions and existing mill capacity expansions, rebar demand in the region is expected to be met mostly by domestic producers, minimizing the need for imports, said Al-Ansari.

In addition to the region's increasing long steel demand, real demand for flat products is also increasing, particularly in Saudi Arabia and the United Arab Emirates, with most of the demand coming from the oil and gas industry. To meet this rising demand, Emirates Steel Industries (Abu Dhabi) has announced a capacity expansion plan to produce hot rolled coil and steel plate with an annual capacity of 3.6million tons. This expansion is expected to be completed in the next five years.

Currently SABIC (Saudi Arabia) is the sole flat steel producer in the region, with an annual capacity of 1.22 million tons.

In addition to planning to meet domestic GCC demand, the region's steel industry is looking outside of the region for new projects to back. Qatar Steel has formed a joint venture company, Qatar Steel International, owned by Qatar Steel and Qatar Mining, to build an integrated steel mill in Algeria with an annual crude steel output capacity of 5 million tons to meet growing demand in the country.

The Algerian mill will be commissioned in two phases. The first phased will see long product annual production of 2.5 million tons, and the second phase will produce flat steel products with the same capacity. The mill will be 49% owned by Qatar Steel and 51% by a local Algerian company.

View Project Report - 300029209

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.