Market Trends of GCC Structural Steel Fabrication Industry
Construction Industry is Dominating the Market
- The booming construction sector in the Gulf Cooperation Council, which is undoubtedly driven by an increase in the total value of contracts awarded in the Kingdom of Saudi Arabia and the United Arab Emirates over the past few years, has and continues to offer a wide range of opportunities for stakeholders at all levels.
- In the Digital Construction Hub Projects Awards Tracker, the value of construction projects awarded in the Gulf Cooperation Council, including buildings, infrastructure, and industry, increased in the second quarter of 2023.
- The Omani projects market recorded USD 20 billion in awarded construction contracts, overtaking the United Arab Emirates (USD 9.8 billion) and Saudi Arabia (USD 8.9 billion). Although higher oil prices contributed to the overall growth in this segment of the Gulf Cooperation Council projects market during the second quarter of 2023, Oman's clean energy plans have significantly increased project award rates.
- In absolute terms, in the next two and five years, the United Arab Emirates is expected to have a project pipeline of USD 29 billion and USD 199 billion, respectively. Compared to Saudi Arabia's USD 521 billion and Qatar's USD 53 billion in the same period, these figures are significant.
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UAE is Dominating the Market
- In 2023, steel demand in the United Arab Emirates was expected to increase by almost 15% due to strong oil prices and a recovery in construction. The demand for steel increased from approximately 2.13 million tonnes in 2022 to about 2.5 million by 2023 as the Middle East's second-biggest economy grew. The increase is mainly driven by high oil prices, an upswing in the country's construction sector, and increased trade with the United Arab Emirates.
- Most of its steel and steel products are imported from the United Arab Emirates. The country is constrained by its steel production and uses imports to meet demand for a large part. China, India, South Korea, and Ukraine are the primary sources of steel imports. Hot-rolled coils, rebars, steel rods, and plates are the most common steel imports.
- The United Arab Emirates intends to increase its steel production capacity by more than 60% to 15 million tonnes per year by 2030 to meet rising demand. New mills and production methods will increase supply, such as directly reducing iron DRI. To build a sustainable and competitive steel industry, the United Arab Emirates aims to be one of the world's foremost trade centers for steel.
- An increase in the construction sector leads to an increase in the structural steel fabrication market. Examples of new construction include Etihad Rail, which is a 1,200-km network that will extend across the United Arab Emirates from the Saudi border to Oman. With a cost of Dh 40 billion (USD 10.89 billion), the project benefits will be visible over the longer term. Annually, the project is expected to serve 16 million passengers and 50 million tonnes of freight.
- Abu Dhabi Midfield Terminal- The trial operations at the much-awaited facility have started. Once open, the terminal buildings are expected to accommodate up to 11,000 passengers per hour or around 45 million passengers annually. The country鈥檚 latest tourism numbers suggest a massive uptick in foreign visitor arrivals.
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