Gulf steel industry accelerates green transition amid global supply chain shifts

The Gulf region’s steel industry is entering a transformative phase, driven by decarbonisation imperatives, infrastructure demand, and strategic integration of mining and manufacturing value chains. As global iron ore flows and pricing trends evolve, regional producers are leveraging technology, renewable energy, and backward integration to position themselves as leaders in low-carbon steel.

Global seaborne iron ore loadings reached 1.247 billion metric tonnes in 2025, virtually flat year-on-year, with Australia and Brazil supplying nearly 78 per cent of global volumes. China remains the dominant importer, accounting for 74 per cent of receipts. This concentration underscores the strategic need for Gulf producers to diversify sourcing and secure raw materials amid volatility driven by carbon-adjusted costs and trade measures like the EU’s Carbon Border Adjustment Mechanism (CBAM). The global iron ore market is projected to grow from $290 billion in 2024 to $397 billion by 2032, reflecting a 4 per cent CAGR, but price swings will persist.

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For Gulf steelmakers, this environment presents an opportunity: competitive access to raw materials combined with the region’s energy cost advantage and modern Direct Reduced Iron (DRI) + Electric Arc Furnace (EAF) technology enables large-scale production of low-carbon steel. “The Gulf is rapidly becoming a strategic connector between upstream mining and downstream steelmaking,” noted Fastmarkets CEO Raju Daswani, citing mega projects such as Oman’s Vulcan Green Steel (5 Mtpa DRI + EAF hot strip mill) and Saudi Arabia’s Essar Group facility at Ras Al-Khair.

Technology and sustainability: A dual imperative

Producers are recalibrating operations to meet sustainability goals without sacrificing competitiveness. Mineral Technologies Group (MTG) is pioneering direct ore-to-metal routes using hydrogen as fuel, alongside solutions that process lower-grade ores while keeping operating costs low. “Green does not have to mean expensive,” Dr. Cyrus Arman - Board Member, Mineral Technologies Group (MTG) said, pointing to turnkey pelletising and DRI/HBI plants priced 30 per cent lower than competing technologies. The company is also investing in tailings recovery plants to help clients recycle low-grade ores, aligning growth with ESG commitments.

Similarly, Jindal Steel Oman is embedding sustainability into its core strategy through three pillars: efficiency, technology, and society. “Up to 50 per cent of the world’s energy production is lost due to inefficiencies across the value chain, and we lead by example,” said Harssha Shetty‏ - ‏Chief Executive Officer - Jindal Steel, Oman, highlighting its top global rankings for production efficiency. Jindal is betting big on renewables, with a 280MW captive solar plant under development and a hydrogen-ready steel complex planned for Duqm using Energiron technology. Its new 6MTPA Sohar pellet plant, set to source ore from Cameroon by 2026, underscores the importance of backward integration for supply security and cost control.

Integration and investment: Building a low-carbon ecosystem

The Gulf’s push to integrate mining and downstream metallurgical value chains is reshaping its industrial landscape. MTG’s Yogi Mine Project in Australia was developed with this vision, enabling regional producers to lock in raw material supply and upstream profits. Jindal echoes this approach, citing Oman’s mining initiatives as critical to reducing procurement risks and maximising local value addition.

These efforts align with broader policy frameworks such as Saudi Arabia’s Vision 2030, which earmarks $186.5 billion for renewables, paving the way for green hydrogen adoption in steelmaking. Decarbonisation partnerships, digital integration, and policy alignment will define the next phase of growth. Gulf steelmakers already emit 30–50 per cent less CO₂ per tonne than global averages — Emirates Steel, for instance, operates at 0.67 tCO₂/t versus the global 1.37 tCO₂/t benchmark.

Digital transformation: Data-driven competitiveness

Beyond physical assets, digital tools are becoming central to competitiveness. Predictive analytics and AI-driven maintenance are improving equipment uptime by 20–25 per cent, while demand forecasting enhances alignment with sustainability targets. Fastmarkets benchmarks and analytics help producers anticipate carbon costs and optimise procurement strategies in a CBAM-driven world.

With $2.5 trillion in GCC infrastructure investments planned by 2030, the Gulf steel industry is poised to become a global hub for sustainable industrial production. By combining renewable energy, hydrogen-ready technologies, and integrated supply chains, regional players are not just meeting the green challenge — they are turning it into a competitive advantage.

Somshankar Bandyopadhyay

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somshankar@khaleejtimes.com

Somshankar Bandyopadhyay is a News Editor with close to three decades of experience. Currently, he manages the business section, ensuring that the top economic and business news of the day reaches its readers.