GCC markets shall witness reorganization

19. January. 2010
ArabSteel

Demand on iron and steel finished products in GCC is expected to remain good during 2010, although it is not likely to reach the peak of 2008 any time soon, due to ongoing infrastructure projects in the region in the worth of about one trillion US dollars that shall continue on their realization schedules, according to local resources interested in following up on market conditions.

As production develops in GCC and the expected growth in 2010 compared to 2009 as a result of expansions carried out by some of the companies, in addition to many new projects that entered production phase, imports are expected to witness stiff competition from local mills after re-imposing the 5% duty on foreign steel imports as of the beginning of this year. This shall help some companies that have been affected by steel imports dumping like in Kuwait where companies cut their production notably in 2009.


Price will be one of the most important factors in favoring local products by major construction companies and real-estate developers in the presence of larger producers such as Saudi SABIC and Al-Ittifaq, Emarates Steel Industries and Hamriyah Steel in UAE, Qatar Steel in Qatar in addition to other producers in the region, especially after the price cut down announced by such companies on their products.


The GCC inner trade is expected to see remarkable activity since products of Gulf countries are duty-free within GCC, thus encouraging some producers back to export markets, despite the strong local demand which may lead some producers to target local markets instead of export.