3rd MENA Billet & Steelmaking Raw Materials Conference

Market Opportunities

hourglassIntegrated steel mills all over the world benefited from the decline in global prices for iron ore concentrate over the past two years as they managed to reduce expenses and raise profitability. However, steel production costs in the GCC countries stayed relatively high because of logistics peculiarities and – most of all – consolidation of DR pellets suppliers in the region, which let other producers of merchant pellets raise premiums.

Usage of purchased square billet became a real alternative for GCC producers. Yet, tougher competition and lower consumption of steel products due to low oil prices will force producers in the GCC states to keep adjusting their business models to the market conditions.

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Despite oversupply in GCC and numerous delays in the project schedule Moon Iron & Steel Company (MISCO) will commence rebar production in 2018 aiming to substitute rebar imports in the region.

The new EAF steel complex being built in Sohar Industrial Estate will be capable of producing 1.2 million tpy of billet and 1.1 million tpy of 8-40 mm rebar, according to equipment supplier SMS Group. At the end of summer MISCO awarded a $230 million contract to the UAE's Shriram EPC FZE for the construction of the new mini-mill infrastructure, Metal Expert reported earlier.

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Saudi Arabia's Al-Qaryan Steel has entered the billet market despite overcapacity and weak demand in the finished products segment.

The new plant commissioned a 300,000 tpy meltshop for merchant billets in Dammam on October 25. Even though demand for semis in the Kingdom is low at the moment due to unfavourable situation in the longs segment the company has some benefits such as scrap availability as Al-Qaryan Steel is a subsidiary of a scrap recycling and trading company Al-Qaryan Group.

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The UAE’s leading DRI-based steel producer Emirates Steel Industries (ESI) is searching for ways to protect itself from high-grade iron ore shortage in the future. The company has signed a letter of intent (LOI) for the purchase of Australia’s Hawsons DR pellets.

Emerging iron producer Carpentaria Exploration Limited announced on September 26 the signing of a non-binding LOI with ESI for the purchase of 0.9 million tpy of DR grade iron pellets from Carpentaria’s Hawsons Iron Ore project, according to official statement.