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Gulf demand for steel to rise 31%
Reuters



Dubai: Gulf Arab countries' demand for iron and steel will jump by 31 per cent by 2008 on stronger demand for construction materials in the region, an industry report said.

The GCC's domestic demand for iron and steel products will climb to 19.7 million tonnes in 2008 from 15 million in 2005, the Gulf Organisation for Industrial Consulting (GOIC) said in a recent report.

"Looking at the massive construction projects we are seeing in the region, it is quite obvious that we're are seeing a boom in the iron and steel industry in the Gulf," an analyst at the GOIC's Industrial Market Intelligence Department said.

"Domestic steel prices in the Gulf and particularly the United Arab Emirates have been soaring, encouraging factories to expand their operations," he added.

Iron and steel producers are banking on demand from the construction industry in the world's biggest oil exporting region, where more than $1 trillion of infrastructure projects are in the pipeline.

With demand for construction materials surging across the Gulf and Asia, some developers estimate that the costs of steel and other building materials have risen by 20 per cent to 25 per cent in the past year.

"It is expected that the GCC member states become one of the important world centres for producing iron and steel in the region within the few coming years," the report said.

"The size of imports of iron and steel products have doubled between 2001 and 2005 from around 7.1 million tonnes to 14.3 million tonnes."

Investments by the GCC countries in iron and steel products manufacturing totalled $6.5 billion in 2005.