The growth model depending on export has constituted an economic methodology on which several countries over the world have relied, because the level of the economic progress is measured not on basis of the volume of what the country imports but on basis of the volume of what it exports. This methodology has been a stimulus for setting up a number of the export industries one of which is the steel industry.
The steel industry is originally described as an export industry, as more than on third of the world steel production goes to the export markets. There is one out of each three tons produced looking for a place in the world markets. Migration of tons of steel to the world markets has increased over the past years, as a result of the increasing demand for the steel products. The steel industry has been at the forefront of the industries affected by the global economic crisis, as a result of the demand and exports decline and the increasing competition among exporters.
Some of the steel industries in the Arab world has, over the past years, opted to set up an industry which depends not only on going to the domestic market but also to be as an export industry. Through their exports, these industries can open up to the world markets by directing their products to these markets and confirming its presence as an industry capable to compete. Several Arab companies have succeeded in taking up this trend and their products have come to have their presence in the world markets.
This trend to export to the world markets has run into a strong opposition by the competing companies at the world level. This trend has resulted in directing the dumping accusation to a number of the Arab steel companies which have entered the world export markets. This trend has also run into a number of decisions and measures made to limit exports and restrict them under the pretense of the priority of making available of the requirements of the domestic market. Even though the constraints which have been made, or most of them, have been cancelled, they left behind them negative results on the volume of exports of steel products to the world markets. The volume of exports has declined from about 25% of the total production during the beginning of this decade to less than 10% during the last two years. Some companies have also lost their shares in the world export markets.
The global economic crisis has created a state of downturn and demand decline, especially for the products, which has pushed the steel exports into a real crisis, resulting in the stoppage of some steel production mills, or in cutting down their production to the low levels. Perhaps the Arab steel industry has been less affected by this situation than a number of industries in the world. The decline of exports at the level of the Arab companies was offset, though partially, by the growing domestic demand which has also caused a growing increase of the volume of exports, amounting to 15.2 million tons during the first half of 2009 of various steel products.
The imports of the Arab countries, especially during the last two years as well as during the first half of 2009, have registered continued increases. Thus, the Arab region has been considered the largest net importer at the world level. Other Arab companies have also come to occupy the first ranks among the largest importers at the world level. This we observe during the first half of 2009: Egypt and Algeria have occupied advanced positions among the ten top importers at the world level.
Despite the fact that the volume of the world exports has shrunk as a result of the circumstances of the global economic crisis, several Arab markets have been considered major destinations for a number of the major exporting countries in the world. Among these markets are, for instance, the Egyptian market which has imported 3.8 million tons during the first half of this year against 1.2 million tons in the same period in 2008, followed, at the second rank, by Algeria which has been a destination of the exports of 3.1 million tons of steel products during the first half of this year against 1.8 million tons in the same period in 2008.
Imports, of long products in particular have caused a strong pressure which pushed the local producers to reduce their prices down to the cost limits, and sometimes below the cost limits in order to maintain their competitive position with the imported products. This has caused an injury to the local steel industries, respectively a threat to the future of this industry. The question remains that if export leads to growth in a number of the world markets, to which direction imports leads? Don׳t most imports coming into the Arab markets, in excess of the need of these markets and within a framework of unfair price competition, constitute a threat to the growth and development of the steel industry in the Arab countries utilizing about 60 – 70% of their production capacity? Besides, Doesn׳t that make a justification for the Arab companies to request protection, or, let us say, take protective measures to prevent injury of this industry, even though this injury has really occurred?
This demand must be advocated and adopted not only by the specific unions or the trade unions but also by the decision-making authorities in this regard. It is a demand to which many industries all over the world, either in the developed industrial countries or the emerging countries have resorted. This demand has constituted a method to face a danger to which this industry is exposed as a result of continued imports which we fear to change into a «bubble» bringing the industry back to the first square of the crisis, which the steel industry has done to override in order to minimize the losses which occurred to this industry and made it lose what it has achieved of profit at the period of the peak of the prosperity of steel.
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