August 29, 2008

Sabic plans to double steel production capacity

Platts reported that Saudi Arabian steel manufacturer Sabic is set to almost double its production of rebar, coils and billets to 1.8 million tonnes per year.

The report cited a Sabic spokesman as saying that “By early February 2008, it is expected the expansion program will have reached its half way point with works due for completion by 2008. We are selling a lot of material to Kuwait and the UAE and there is a lot of demand from all of the GCC countries. We are also receiving a lot of enquiries from Egypt, Syria Jordan and Iraq, but we are mainly focusing on Gulf countries."

The spokesman added that demand, was particularly strong from the rapidly developing United Arab Emirates and as production increases the company will be required to up it raw material inputs, currently split 80% iron ore, principally sourced from Brazil, to 20% scrap from the local, Turkish and Russian markets. With scrap prices on the up and the cost of steel billets gaining ground on finished products some prices hikes on the company's output could be expected. He added that shortage of available trucks used by the company to transport materials to its customers could also lead to future price increases as it vied with other industries to charter long term haulage contracts.