General Secretary's Report104th Regular Session for board of directors 14th-15th May, Kingdom of Bahrain
- Our meeting is held today in the kingdom of Bahrain which hosts the works of the board of directors, On this occasion, Arab Iron and Steel Union (AISU) expresses its deepest gratitude and thanks fullness to the government of the kingdom and its generous people and for the this hosting by Gulf Company for Iron and Steel to hold the meetings of the board of directors and for the efforts exerted by the company in the setting and preparation for this meeting, the following lines will provide a quick summary about the steel industry in 2011:
- 2011's results showed a good image for most of Arab companies, this image can be described as a fresh start for Arab Steel Industry.
- Massive investments and projects executed by Arab countries in Gulf region, especially, infrastructure and huge building projects such as; harbors, airports, and speedways which have had positive influence on Arab steel industry since this very industry has reacted with the same pace with those projects to fulfill their needs of various steel products via creating new projects which are being carried on by steel mills or the expansions accompanying the current projects.
- Those expansions carried on by steel mills have been embodied in new production lines aiming to develop the products spectrum fulfilling requirements of these projects whether of rebars , wire rods, sections, or flats of all kinds.
- Not only expansions carried on by the current mills, but also there were investments to build new projects in order to boost the capacities of various steel products in many Arab countries, especially the Gulf region.
- However, it's expected that production volume in Arab countries will reach over 30 mlt of finished products by the end of 2012.
- There is still an acceleration in demand volume in Arab countries on various steel products which may approximate 40 mlt by 2014, due to the huge development that most of Arab countries are witnessing in infrastructure and building projects.
- In addition, the political stability that started to dominate in a number of Arab countries in North Africa early this year, will have a positive outcome on strengthening Arab Steel industry in those countries, especially since they have the fundamental base to accomplish this as soon as possible.
- "2011" has witnessed a remarkable increase in supporting the commercial exchange of steel products between Arab markets which is considered a positive step to achieve the integration in steel industry in Arab countries.
- Nevertheless, dumping Arab markets with foreign products is still harming Arab steel industry, thus, this phenomena is affecting investments in this sector and limiting the launch that Arab steel industry aspires to, which necessitates facing this foreign invasion in order to avoid the slowdown in growth process in this sector, but also to proceed its accelerated growth which we saw in the last period.
- Arab Iron and Steel Union wishes that our meetings will shed more light on the issues facing Arab steel industry to work together on setting a general strategy to face these issues in order to provide steel industry with all factors of growth and prosperity in the future by God's Will…. In the coming pages we will have a summarized overview on some aspects of this industry in Arab countries who are members in AISU, and if the rapid change dynamics linked to steel industry in all Arab countries ,without exception, refers to that this view is linked only to the surrounding circumstances at the time of writing this report, usually we kick off by giving a quick view o steel industry in Arab countries hosting this meeting who is this time: kingdom of Bahrain.
Steel industry in the kingdom of Bahrain:
- Bahrain has witnessed a distinguishing industrial revival in the last years, steel market in Bahrain is considered one of the promising markets in Gulf region due to the development projects in the kingdom.
- The mil in the "Gulf company for Industrial Investment" is considered the first mill built in the region for iron ore pellets with 11 mtpy capacity since the last expansion, designed to fulfill most of DRI requirements to mills in the Arab region.
- Iron and Steel company (SULB) in Bahrain is heading towards boosting its rebar capacity to fulfill the increasing demand of bars in the local market during this year, demand on rebar in the kingdom is estimated by 250.000 tonnes and current capacity for the company is about 200.000 tonnes.
- Some of the demand is met by imports from neighboring Arab countries such as; Qatar, UAE, as well as Turkey. The future expansions for Iron and Steel company in Bahrain aims to meet all domestic needs of rebars then moving to exports.
- Demand on rebars has been affected during 2011 by the shrinkage in the number of fundamental projects in the kingdom, and it's expected to normalize again during 2012.
- As well, steel tradesmen in Bahrain have reduced their imports from Turkish market which limits the order volume to no more than 10.000 tonnes each time, this provision contradicts with the tradesmen' will in Bahrain.
- It's expected that Bahrain will witness many huge projects related to the execution of speedways and construction programs during 2012, in addition to many other projects related to infrastructure.
- All these projects will increase demand on steel products and it's expected that SULB will develop its production plans to hurry in fulfilling domestic market needs of rebar.
- The ambitious expansions which are currently done in Bahrain in steel sector aim to increase melting capacity through an integrated project built to include one 1.5 mtpy DRI plant, 1 mtpy meltshop, and one sections line producing heavy to medium sections.
- It's expected to start experiments phase for starting up the meltshop on September, and experiments phase for DRI plant during Q1 of 2013.
- Demand increase on various steel products in the area surrounding Bahrain, especially oil countries, helps in encouraging more investments in steel projects to meet their needs of all kinds of steel, especially in; KSA, Qatar, and UAE.
Quick view on steel industry in the Arab World:
- Arab region is characterized by the existence of mutual and strong relation between steel demand and oil prices. Moreover, Arab countries ,especially oil ones, are characterized by the acceleration of growth rates and increasing number of investments in steel sector to meet the increasing demand on various steel products.
- Inputs' prices for iron and steel industry are still playing a major role in defining the final products price, especially, iron ore pellets and scrap.
- Most steel products in Arab world have witnessed a shaky direction in prices during 2011, and even if last year has seen a kind of stability since the Q3 of 2011, prices returned to rise slowly since Q4 of 2011.
- Although scrap prices have taken a rising direction since Q3 of 2011, but finished products' prices have not corresponded quickly with this rise, this could be due to demand decrease on steel in a number of Arab countries because of the non-stable political situations many Arab countries have gone through during 2011.
- Turkey has increased its exports to Arab countries ,especially Gulf countries, during H1 of 2011, afterwards these exports have declined remarkably during H2 of 2011. While exports to North African countries have retreated remarkably during 2011 due to demand decrease on steel products and lack of governmental investments directed to huge investing projects which required enormous tonnages of steel products; this was due to the difficult economic situations in some North African countries, it's expected that 2012 will witness more stability in those countries and economic growth wheel will accelerate back to normal rates which were steady during the last years resulting to demand increase on steel products in those markets, in addition, investing rates in infrastructure and construction projects will normalize again.