The global steel industry has witnessed an unprecedented price rally to 10-year highs.
Last year and early 2021 will probably never be forgotten as COVID has brought all sorts of changes to people’s daily lives as well as challenges to many countries’ businesses and economies.
The steel industry in the Middle East is no exception: although its resilience has been tested, it has managed to stay on track in a number of ways such as mergers and acquisitions. Steel production has been affected by a lack of oxygen supplies, some of which have been diverted for medical purposes.
Other challenges for the business community have included a lack of container and vessel availability, as well as blank sailings for weeks and high freight charges. In addition, the Suez Canal was blocked in both directions to marine traffic for many days by the giant container vessel “Ever Given”, requiring nine tugboats to free it.
There has also been the unusual situation for this region of the domestic price of hot-rolled coil (HRC) exceeding that for rebar; most of the time, rebar commands the higher price as the most-consumed steel product. This is due to the widespread revival of manufacturing sectors outside the region in places where COVID has been brought under some measure of control, triggering a surge in flat steel demand - especially for HRC, sending its price far higher worldwide.
The steel industry in this region is projected to grow by 20%, driven by a number of ambitious projects. Demand for steel products remains on a stable upward trend despite fluctuations in the construction market. Further considerable growth is expected from 2026 onwards with local producers looking to cater for anticipated projects.
Metals Bank FZCO (JOR), Representative of the BIR Young Traders Group