Demand for steel is on the rise in UAE

Demand for steel is on the rise in UAE
Bharat Bhatia, Founder & CEO, Conares

Published: Tue 27 Dec 2016, 11:00 PM

Last updated: Thu 29 Dec 2016, 6:40 PM

With real estate and local infrastructure development in full swing, demand for steel is on the rise
Conares, the second largest and the only private steel manufacturer in the UAE, is geared for a busy 2017. The company has already earmarked the increase in its manufacturing capacity to 1 million tonnes. The conglomerate based in Jebel Ali Free Zone commenced the installation of its 12'' pipe mill at its facility.

Steel manufacturing sector in the UAE is currently witnessing standard trends with improvement in growth by 15 to 20 per cent compared to that of the last year, thanks to the announcement of major infrastructure development projects across the country. From the steel industry standpoint, local manufacturers are in a strong position to cater to each of the upcoming projects.

The state-of-the-art steel plant of Conares spread in an area of over 1.5 million square feet at Jafza currently manufactures steel pipes and rebars. The rebars form about 20 per cent of the UAE market share and the pipes cater to 25 per cent of the total market demand in the region. Operational in these two major segments of the steel industry, Conares has carved a niche for itself and grown to be a key manufacturer. Its global and regional presence gives Conares a competitive advantage in sourcing raw materials. Conares has been growing to deliver 1 million tonnes of steel annually. Being a 100 per cent privately owned entity, the company's assets exceed $300 million of investments in the UAE.

Commenting on Conares' outlook for 2017, Bharat Bhatia, Founder and CEO of Conares, said, "We have seen major developments in 2016. The extended support from Jafza has been key in helping us achieve major milestones. The overall outlook for the steel sector is mostly positive with 2016 having witnessed steady growth. In the international market; iron ore, coking coal and scrap are in the range of $300. As a prediction, I would say steel would be Dh1,875 to Dh1,900 per tonne - and that is at a minimum. The steel market mostly can be viewed with only a short-term outlook.
Focussing on the current market and ongoing trends we can expect to see a growth of about 12 to 15 per cent in 2017 compared to 2016. With 2020 in the near horizon, we will witness real estate and local infrastructure development in full swing. We foresee no decrease in demand for steel."
"2016 has been fairly good with a consumption of 3 to 3.2 million tonnes of steel, while in 2017 we expect the market to grow to about 3.5 to 4 million tonnes. Looking further at 2018 and 2019, there will be moderate growth. The steel market in the UAE is very active with the local producers being able to match up to the international prices and the country's growing demand. We are indeed very thankful to the UAE's Ministry of Economy for the support extended to us. We actively seek further considerations from the Government to protect the interests of local producers in the Emirates. The competition among the indigenous and international imports is fierce with the UAE manufacturers matching up to the prices at most times."
"The recent announcements in the construction sector are expected to boost the steel manufacturing sector over the next few years. These projects are the key driver to support the steel industry's growth, followed by oil and gas, petrochemicals and other projects," Bhatia added.
Apart from the announcement of major landmark projects; the improved efficiency of supply chain ecosystem in the industry, the capacity and technologies in place to cater to the requirement, and facilitating the adoption of latest innovations in production have also played a key role to signal a boom in the steel industry. Moreover, steel manufacturing has been vital to the growth of non-oil-dependent gross domestic product, further serving the economic diversity.
The company's production capacities for its steel rebars are at a 100 per cent utilisation; while its steel pipes are at 65 per cent utilisation.

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