UAE steel demand to rise 25 per cent in 2015

The boom in the steel industry may touch an almost 25 per cent increase in steel demand in 2015, against an estimated 15 per cent growth in 2014.

Dubai — Dubai’s constant attempt to upgrade its infrastructure to align with the vision of His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, has spelled a boom for the local steel industry.

The boom in the steel industry may touch an almost 25 per cent increase in steel demand in 2015, against an estimated 15 per cent growth in 2014, said a top official of Conares.

“Key projects like Canal, airport development, theme parks, Etihad Railway, the extension of the RTA Metro will boost steel demand in the local sector and Conares is all set to grab this opportunity. We have plans to set up additional facility in Jebel Ali and aim to produce an installed capacity of one million tonnes by June 2015,” CEO Bharat Bhatia told Khaleej Times on the sidelines of The Big 5 Exhibition on Wednesday.

“Conares recorded a double-digit growth in the 2014, and recorded an 80 per cent utilisation of its capacity. Sales of Conares steel products increased manifold, and profit of the business also registered significant growth. We are in the position to serve the growing demand and are focused on maximisation of the capacity of our rebar mill, in order to meet the increasing demand for steel rebar in the region. The high-demand and order bookings indicate a 100 per cent utilisation of our installed capacity,” he said.

The-state-of-the-art plants of Conares covers an area of over one and a half million square feet. The $150 million worth Conares, which is now operational in two major segments of the industry, generates Dh1.2 billion in annual revenues. “Today the company has a staff of 600 plus and we will require more of white collared and blue collared strength to cope up with the 250,000 additional capacity, which we plan to add with the new facility to the existing 750,000 tonnes,” said Bhatia.

The Gulf region’s second largest steel plant in the private sector opines that the local steel manufacturers should increase their production to cater to the current demand, gradually preventing the market share for the overseas import of steel products in the UAE. Currently, about 60 to 70 per cent of demand for steel rebar in the UAE market is addressed by the local manufacturers and the rest are covered by imports. The UAE rebar market is estimated to have kept a stable demand of about 3-3.3 million tonnes for the current year.

The huge growth in the steel industry is a result of other factors as well. Construction companies, developers and traders turn to local steel producers due to the reliability of local delivery compare to the imports of debars which normally takes a minimum of 60 days to arrive in Dubai.

Bhatia added: “The Dubai steel market has enough capacity to support the new wave of infrastructure developments that is planned up to 2020. The technologies and capacity to cater to this requirement immediately are in place and operating.”

Conares, the leading provider of downstream steel products in the Gulf region, showcased its range of products including rebar, ERW and galvanised pipes at The Big 5 Dubai 2014. The state-of-the-art stand of Conares wass set up in Sheikh Saeed Hall-2 of the Dubai International Convention and Exhibition Centre. The company, being a key player in steel manufacturing and trading steel pipes and steel rebars for both the global and regional suppliers, represents over 15 per cent of the UAE market share in their specific product segments.

Conares currently supplies about 350,000 metric tonnes of rebar, about 10 per cent of the total domestic requirement in the UAE. The company also supplies approximately 100,000 metric tonnes of pipes, which is around 25 per cent of the total market demand in the region. Conares, currently, is among the three major steel rebar mills continuously operating in UAE.

“The outlook for steel market for the year 2015 looks promising, although the later part of the 2014 slightly affected by the depressing global steel prices. But project anticipation keeps the mood to be promising, although some concerns on liquidity started to return in the market. Steel rebar prices have performed in the normal band of price range for the year. It has peaked at $625 from a low of $550 per metric tonne, and is currently hovering at about $575 per month,” added Bhatia.

• sandhya@khaleejtimes.com