September 08, 2008

Chinese steel imports into GCC surge

Xinhua quoted Mr Tang Xiaobo analyst of UBS as saying that China has experienced a drastic jump in demand for its steel products in Iran, UAE and Syria as the Gulf countries spent petrol dollars on infrastructure construction.

In the April to October 2007 period, China’s steel exports to Iran rocketed 22 fold to 2.3 million tonnes as compared to April to October 2006 period. UAE increased steel imports by 2.96 times to 1.3 million tonnes and Syria by 6.59 times to 5 million tonnes.

The surge in tonnage correlated with a drop in prices for steel exports to Gulf countries, as demand from the crude exporters was mainly for cheaper steel used in construction, such as reinforced steel bars, long steel and steel wire rods. The new export trend has benefited China's private and smaller steel producers as larger domestic firms have turned away from products with low added value.