Gulf steel imports to drop 20% this year |
|
Network this!
Text Size 
Steel imports to the UAE have dropped by almost 75 per cent compared to last year, according to an industry source.
"About 800,000 tonnes of steel were imported [every month] into the UAE during the peak months of July and August last year," said Shyam Bhatia of Alam Steel. "The numbers today stands at about 200,000 tonnes. The reduction is a result of a massive pile up of stocks combined with a drop in demand," he added.
Industry sources have said that import prices for rebar have crossed the $500 (Dh1,836) mark.
Meanwhile, according to a senior official of Balli Steel, one of the largest privately owned independent commodity traders, Dubai used to import almost 450,000 tonnes of steel every month when the construction was at its peak until the middle of last year.
"Today the imports have reduced to about 50,000 to 70,000 tonnes per month. There are still existing stocks, although some traders have started importing and stockists are buying unavailable sizes," said Ghassan Soudah, a Senior Manager at Balli Steel, UAE. "We cannot call it a normal consumption and surge in demand," he added.
According to estimates, steel imports in the Gulf were expected to fall 20 percent this year due to a slowdown in the oil-driven boom. Billions of dollars of construction projects are put on hold or delayed.
The demand for steel in the Gulf Co-operation Council (GCC) surged to 20 million metric tonnes in 2007. According to reports, while the global steel consumption during 2000-2006 witnessed a growth of six per cent, consumption in the GCC grew at a eight per cent on account of rising use of steel in various forms.
The growth in the UAE steel industry was led by soaring imports that rose from around four million tonnes in 2004 to six million tonnes in 2006. The UAE also imported nine million tonnes of steel in 2007, a 36 per cent increase year-on-year over 2006. Figures are not yet available for 2008.
The UAE was ranked ninth in the world's top 10 importers of steel in 2007, according to the UK-based Iron and Steel Statistics Bureau.
According to Soudah, the situation in Abu Dhabi continues to improve whereas there is some movement as far as projects in Dubai are concerned. "We are witnessing some demand from projects, which were earlier put on hold, but where work has now resumed. However, we cannot term it as a major recovery. The situation is comparatively better than how it was about two to three months ago," he said.
Bhatia, however, said the current local demand is being satisfied by increased local production. "We have seen several capacity expansions within the UAE during the past two years. Local production will mean a decrease in dependence of imported rebar," he said.
Last January, RAK Steel started its operations with 500,000 tonnes per annum. Emirates Steel's first phase of expansion has increased its production from 650,000 tonnes per year to two million tonnes. It recently announced phase II of the expansion that will boost the plant's capacity to three million tonnes per annum by 2011. The company is also looking to further boost its capacity to 6.5 million tonnes annually by 2013-14 through capacity expansions and acquisitions.
Meanwhile, the prices of rebar have moved up during the past three weeks. Rebar prices in the UAE have increased mainly due to the rise in Turkey rebar exports to the country. While last week, it stood at $480 per tonne to $490 per tonne CFR UAE, prices have again moved up. "Turkey has hiked its prices to more than $500 and the GCC is a main importer of Turkish steel. However, there have been no bookings for that price so far. We are witnessing some resistance from traders here," he added.
Soudah said the price hike will not last for long. "We are soon going to witness another phase of decline in the range of about $30 to $50 per tonne," he said.
Meanwhile, Vahid Alaghband, Group Chairman of Balli Steel, has forecast that the global economic recovery will sequentially occur in five phases, with increased demand for steel in each sector acting as a barometer or indicator of such recovery.
He said global annualised steel production this year is forecast to be 1.1 billion tonnes, down on last year's record 1.3 billion tonnes.
The production in the Middle East declined from 6.96 million tonnes during the first five months of 2008 to 6.94 million tonnes during the same period this year, a fall of 0.3 per cent.
According to a report, the steel markets of North America, Europe and GCC have been the hardest hit by the credit crisis, overstocking and speculation on future prices. The company expects the market in the GCC economies to see a gradual improvement while North America and Europe will experience continued problems. Forecasts indicate that Japan and South Korea will also continue to face economic challenges since their industries are more dependent on Western Europe and North America.
The report considers that the second phase will be characterised by a gradual recovery of the housing market that is expected to begin in Q4 2009. It will be led by key cities such as London, New York, Singapore and Hong Kong. Phase three of the recovery will be characterised by increased demand for products that rely on unsecured loans and consumer-credit. The report says that the retail, white goods and automotive industry will begin to see a return to recovery to begin around the second quarter of 2010.
It also expects a recovery of the global shipbuilding industry, providing a major boost to steel traders, in the first quarter of 2011, marking the return to more normal international trading patterns and leading the fourth phase of the global recovery. The fifth phase will be a return to more normal investment in capital goods by producers as they gain confidence in the state of the world economy.
Alaghband said in a company statement the credit crunch and global economic downturn has had a "tsunami effect" covering all key economic sectors: Steel and other commodities, property, automotive, capital goods and finance. "At present, steel producers are operating only at about 50-60 per cent of their capacity," he said.
By Joseph George
© Emirates Business 24/7 2009
Community Comments (0) - 
Comment on this article 
Comment on this article
The opinions of the authors expressed herein do not necessarily state or reflect Zawya. Read our Comment Policy.
Loading ...
Zawya Comment Policy:
-
Zawya encourages you to add a comment to this discussion. You agree that when you add content to this discussion your comments will not:
1.1 Contain any material which is libelous or defamatory of any person, is obscene, offensive, hateful or inflammatory or causes damage to the reputation of any person or organisation.
1.2 Promote sexually explicit material, violence, discrimination based on race, sex, religion, nationality, disability, sexual orientation or age or any illegal activity.
1.3 Be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence.
1.4 Be threatening, abuse or invade another's privacy, or cause annoyance, inconvenience or needless anxiety.
1.5 Be used to impersonate any person, to misrepresent your identity or affiliation with any person, or be likely to deceive any person.
1.6 Give the impression that they represent Zawya.
1.7 Advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse. - The content posted on www.zawya.com is created by members of the public. The views expressed are theirs and unless specifically stated are not those of Zawya. Zawya reserves the right to review all comments prior to posting and edit or delete any contribution, but Zawya is not responsible for and can not be held liable for any content posted by members of the public on www.zawya.com.
- Zawya is not responsible for the availability or content of any third party sites that are accessible through www.zawya.com. Any links to third party websites from www.zawya.com do not amount to any endorsement of that site by Zawya and any use of that site by you is at your own risk.
- By submitting your comment, you hereby give Zawya the right, but not the obligation, to post, air, edit, exhibit, telecast, webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comments worldwide, in perpetuity.
Loading ...
Post Your Tender Notices for FREE
(No Sign-in Required)
Zawya Tenders is a Tender Notices service entirely driven by contribution
from issuers in both public and private sectors. It is not an e-tendering service and is entirely FREE.
As an Issuer, you can benefit from posting an unlimited number of Tender
Notices for FREE and reaching out to an online community of bidders.
The service also offers you a tool to track the interest of bidders to your
tenders 'live' online.
from issuers in both public and private sectors. It is not an e-tendering service and is entirely FREE.
As an Issuer, you can benefit from posting an unlimited number of Tender
Notices for FREE and reaching out to an online community of bidders.
The service also offers you a tool to track the interest of bidders to your
tenders 'live' online.
| Construction Tenders | Due Date |
Community Buzz
Stories
Companies
Most viewed companies by Community in the last 24 hrs
| Company Name | Country | Industry |
| Consolidated Contractors Company | Overseas | Construction and Design |
| Saudi Binladin Group | Saudi Arabia | Construction and Design |
| Saudi Electricity Company | Saudi Arabia | Electric Utilities |
| Saudi Telecom | Saudi Arabia | Telecommunications Services |
| Sharjah Electricity and Water Authority | UAE | Electric Utilities |
| Hyundai Engineering and Construction Company - Saudi Arabia | Saudi Arabia | Construction and Design |
| Al Azizia Panda United Company | Saudi Arabia | General Retailers |
| Qatari Diar Real Estate Investment Company | Qatar | Landlords and Developers |
| Emirates Telecommunications Corporation | UAE | Telecommunications Services |
| Almarai Company | Saudi Arabia | Food |
Projects
Most viewed projects by Community in the last 24 hrs
| Project Name | Country | Sector |
| Takreer - Ruwais Refinery Expansion | UAE | Oil and Gas |
| Al Futtaim Carillion - Marina Hotel (Yas Island) | UAE | Real Estate |
| Emirates Aluminium (EMAL) - Smelter Complex - Phase 1 | UAE | Industry |
| Abu Dhabi DOT - Abu Dhabi Metro | UAE | Infrastructure |
| ENEC - Nuclear Power Plant | UAE | Power and Water |
| SATORP - Jubail Refinery and Petrochemical Complex | Saudi Arabia | Oil and Gas |
| Dubai RTA - Dubai Metro | UAE | Infrastructure |
| Al Safwa - Jeddah Cement Plant | Saudi Arabia | Industry |
| Qatar Bahrain Causeway Foundation - Qatar Bahrain Causeway | Bahrain | Infrastructure |
| Qatar Bahrain Causeway Foundation - Qatar Bahrain Causeway | Qatar | Infrastructure |