Wednesday, Nov 23, 2016

Dubai: Steel mills in the UAE and other Gulf states will be able to take in their stride the 5.95 per cent duty imposed by the US on shipments from here, industry sources say. The duty came into effect with immediate effect.

With a handful of exceptions, the US is not a primary end-user market for most of the Gulf’s steel producers. For them, the duty structure in their own markets are the ones they should be focused on.

Sources said that Gulf governments will need to fast-track any decision on whether they should be raising their import duty on all steel imports from 5 to 15 per cent. Such a move would stem the flow of Turkish steel into these markets and also provide a needed boost for locally and Gulf-made steel mills, they added.

“The concerned authorities in the Gulf states are reviewing the steel industry’s request — we hope that a favourable decision will be made,” said Bharat Bhatia of Conares Steel. “Turkish steel imports currently cost Dh1,780 a tonne to ship in and local mills can easily match those prices.

“It’s the Turkish exporters that are flooding the market — the Chinese are not an issue because they have such long lead times — around three months — to deliver. A 15 per cent import duty would give local manufacturers a lot of breathing space.”

The Gulf’s steel industry is expected to record a 15-18 per cent increase in 2017 and that would be on top of a 15 per cent gain this year over 2015.

Saudi Arabia and the UAE account for nearly 19 million tonnes of steel production, while Oman, Qatar and Kuwait add another 8 million tonnes. Bahrain 750,000 tonnes of annual production.

By Manoj Nair Associate Editor

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