Quarterly Report – September 2020

Following the marked downturn in quarter one, the UAE economy is believed to have contracted at a sharper pace in the second quarter owing to the impact of the COVID-19 pandemic. The combined effect of collapsing oil prices, falling oil production and global travel restrictions hammered economic activity in the second quarter. Moving into quarter three, data suggest a recovery is under way: outlets in Abu Dhabi have been operating at almost full capacity since late July. On August 8, moreover, the central bank announced measures to further ease lending to the economy, which should support the recovery in the second half of the year. On top of that, the agreement between the UAE and Israel to normalize relations unlocks potential benefits for trade, investment and tourism.

GDP will contract this year as both the oil and non-oil sectors shrink owing to depressed global demand and travel disruption caused by the pandemic. Oil prices have made a mild recovery but still pose a threat to public finances. The uncertain course of the pandemic could continue to weigh on trade and tourism, clouding the outlook.

In the Middle East and Africa, the petroleum and chemicals industries are expected to dominate the installation of stainless steel cable ties in the near future. Increasing demand for such ties is also expected from the energy sector, especially wind and solar energy. Furthermore, the projected growth of the stainless steel cable ties market is likely to be driven by the automotive, electronics and shipbuilding industries. Major brands are likely to focus on the expansion of production capacity and new product development to strengthen their footprints in the global stainless steel cable ties market. Companies are engaged in expanding their product portfolios and business through online modes of distribution. They are also working towards upgrading their existing products to increase profitability for the sustainable growth of their businesses.

The worth of the global stainless steel market is projected to reach US$ 181 billion by 2027 thanks to a compound annual growth rate of 6.3% over the 2020-27 period. The rise in demand for stainless steel in the healthcare sector for applications such as kidney dishes, dental and surgical instruments, MRI scanners and stem sterilizers will add momentum to the industry’s growth. Furthermore, production of consumer goods such as cookware and stoves will continue to sustain the demand for stainless steel over the coming years.

Despite the positive outlook for the global stainless steel market, growing adoption of carbon fibre as an alternative for stainless steel in the automotive sector owing to its light weight and high strength properties may restrain the industry’s growth over the analysis timeline.

Nickel prices have edged up in recent weeks amid firming demand, particularly from China. On August 7, nickel was trading at US$ 13,651 per tonne, or 1.7% more than on the same day of the previous month. However, the price was 7.8% lower than on the same day a year earlier and was down 2.1% on a year-to-date basis. Nickel prices have gained further ground over the past month, chiefly driven by the stronger demand from China. Positive car sales data are among those factors to have fuelled market hopes of a wider economic recovery. Prices were also supported by the call from Tesla’s chief executive Elon Musk for increased nickel mining to satisfy the company’s growing appetite. On the flip side, heavy rain and a new lockdown in the Philippines have stoked supply worries. Also, increasing trade war tensions and a US dollar bounce-back weighed on prices in early August.