Middle East Oil and Now Middle East Steel

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Researched by Industrial Info Resources (Sugar Land, Texas). Lurking in the shadow of a dominant Middle East oil industry, is an industrial sector not known to exist in that geographical region by the rest of the world; the Middle East steel sector. When the world thinks of Egypt, Iran, Qatar, Saudi Arabia, United Arab Emirate (UAE), and Libya, we think of the vast oil resources that nature has endowed to these countries, we do not associate them with the Metals & Minerals Industry, let alone a strong steel sector. The governments of these Middle Eastern nations are cognizant of the fact that to build and sustain a strong economy, a nation cannot rely on one single industry. To this end, these oil producing nations are driven to diversify their economies. The Metals & Minerals Industry, specifically the steel sector, is being built into one of those emerging industries.

Although, the governments still own and control most steel production facilities, private companies are also making great inroads, and together they are building a strong and viable steel sector in the Middle East. The Arab steel industry produces over 13 million tons of crude steel and steel-related products annually. Most of it is consumed domestically for infrastructure and civil works. There continues to be a considerable increase in demand for steel and steel-related products in Qatar, Kuwait, Saudi Arabia, Bahrain, U.A.E., Iraq, and Oman. Arab steel producers are gearing up this meet this demand with increased production through greenfield and brownfield projects.

Through alliances, Arab steel producers have the world steel market at their disposal. For instance, when The Essar Group (Mumbai, India) teamed up with Tata Iron & Steel (Mumbai, India) to build a greenfield steel mill in Iran, and when it teamed up with Qatar Steel to build a steel mill in Qatar, Essar brought along its local and international client base, which includes Caterpillar, JCB, Hyundai, General Motors and Swaraj Mazda, Limited.

Industrial Info is currently tracking seven active steel projects at various stages of development in the Middle East, with a combined capital investment of nearly $4 billion. The four largest of these are three greenfield steel mills in Qatar and Iran and a brownfield steel bar mill in U.A.E. Over $3.5 Billion will be invested between 2006-2009 to bring these mills online. Our research also shows that over $1.billion is being spent on six steel projects during the 2005-2006 timeframe, and a major portion of which is being implemented this year. Among them is the $253 million greenfield steel mill in Jeddah, which is under construction for Al-Rajhi Saudi Group (Riyadh, Saudi Arabia) by Dywidag International, and a $150 million expansion of the Al-Jubayl DRI Plant by Voest Alpine for Saudi Iron & Steel (Al-Jubayl, Saudi Arabia). Based on current trends, the boom in the Middle East steel sector is likely to continue through 2010.

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Industrial Info Resources (IIR) is a Marketing Information Service company that has been doing business for over 23 years. IIR is respected as the leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.