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MENA urged to increase steel output capacity to cut imports
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Monday, 08 Oct 2012
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The Saudi Gazette cited Mr Adel Hussein regional director of Arab Iron & Steel Union in Egypt as saying that Arab countries need to build more steelmaking capacity to satisfy growing demand from investments in residential housing and infrastructure and reduce their heavy reliance on imports.

Saudi Arabia for example has increased crude steel output from 4.67 million tonnes in 2008 to an estimated 6.9 million tonnes in 2012 but the country still suffers from a billet deficit and sees growth in rebar imports as new construction projects accelerate.

Mr Hussein said that local producers SABIC, Al Tuwairqi and Rajhi Steel will produce an estimated 7.4 million tonnes of billet in 2012 leaving an added requirement of 2.5 million tonnes to be imported. A similar situation can be seen in other Arab Gulf nations. The Gulf is forecast to invest some USD 285 billion in new construction projects between now and 2016 which will require around 47.5 million tonnes of steel meaning imports are likely to continue in the near future.

North Africa, meanwhile, could reverse a decade of stagnation as Algeria, Morocco and Tunisia are likely to see growth. In 2001 to 2002 the region’s output was three times that of Gulf states but by 2012, estimated output was at 9.6 million tonnes, 4 million tonnes below the Gulf’s anticipated output of 13.6 million tonnes.

North Africa’s relatively low current steel per capita consumption is less than 100 kg, indicating significant room to grow for steelmakers. In 2012, MENA countries are forecast to produce 23.2 million tonnes or 1.45% of the world’s crude steel.

Meanwhile, the export offers from traditional European suppliers dropped further owing to slow rebar demand in the Middle East market at present. Rebar offers from South Europe are heard at around USD 620 per tonne to USD 635 per tonne CFR decreasing by about USD 10 per tonne to USD 15 per tonne WoW and USD 35 to USD 50 in the past 15 days. In Saudi Arabia, Qatar Steel rebar export offers to Saudi are steady at around USD 720 per tonne CPT due to government price regulations. Turkish mills have been selling at around USD 590 per tonne CFR Jeddah.

In UAE, amid slack rebar demand and less construction activity, Emirates Steel Industries is reported to have dropped its rebar price by USD 40 per tonne MoM. The new price is $630 per ton EXW for October production.

Qatar Steel is offering rebar in the UAE market at around USD 630 per tonne to USD 635 per tonne CPT. Conares is heard as offering at USD 625 per tonne to 630 per tonne EXW. In Iraq, CIS rebars to Iraq are heard at around USD 680 per tonne to USD 690 per tonne CPT Baghdad.

Turkish rebars are reported at around USD 690 per tonne to USD 700 per tonne CFR which reflects a price drop of around USD 15 per tonne to USD 20 per tonne in the past two weeks. In Lebanon, Turkish rebar offers are heard at around USD 605 per tonne to USD 610 per tonne CFR but buyers are not ready to accept this price level.

In Turkey, Kardemir has reduced its prices by around USD20-25 per ton and is now offering at USD 590 per tonne to USD 595 per tonne EXW amid poor domestic demand. Local mills are reported offering rebars at USD 585 per tonne to USD 600 per tonne EXW.

ArcelorMittal Annaba was offering rebars at about USD 660 per tonne to USD 680 per tonne EXW last week. In Egypt amid low inventories, rebar bookings are heard to have picked up. Buyers have reported that Turkish rebars to Egypt are now offered at around USD 600 per tonne to USD 610 per tonne CFR. The prices are forecast to drop by another USD 5 per tonne to USD 10 per tonne in the coming weeks.

CIS rebar offers are reported at around USD 600 per tonne to USD 605 per tonne CFR. Last week, local rebar producer prices were quite high when compared to CIS and Turkish material at around USD 640 per tonne to USD 660 per tonne EXW. However owing to the competition, they had to cut the prices by around USD 30 per tonne to USD 40 per tonne and the new prices are heard at around USD 610 per tonne to USD 620 per tonne EXW.

Source - Saudi Gazette.com

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